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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
-----------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2000
Commission File Number 1-10515
JMAR TECHNOLOGIES, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 68-0131180
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
3956 Sorrento Valley Blvd.
San Diego, CA 92121
(858) 535-1706
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(Address, including zip code and telephone number including
area code of registrant's principal executive office)
Indicate by check mark whether the registrant 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, and has been subject to the filing requirements for at
least the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (August 2, 2000).
Common Stock, $.01 par value: 22,181,201 shares
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INDEX
<TABLE>
<CAPTION>
PAGE #
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<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - December 31, 1999 and
June 30, 2000 2
Consolidated Statements of Operations - Three months ended
June 30, 2000 and 1999 and six months ended June 30, 2000
and 1999 3
Consolidated Statements of Cash Flows - Six months ended
June 30, 2000 and 1999 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION
Item 1. N/A
Item 2. Changes in Securities 12
Item 3. N/A
Item 4. N/A
Item 5. N/A
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
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PART I - FINANCIAL INFORMATION
JMAR TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents .................................... $ 8,944,069 $ 2,323,127
Accounts receivable, net ..................................... 7,094,007 7,079,435
Notes and other receivables .................................. 26,242 32,551
Inventories .................................................. 6,195,763 6,253,336
Prepaid expenses and other ................................... 1,237,148 901,688
------------ ------------
Total current assets ..................................... 23,497,229 16,590,137
Property and equipment, net ...................................... 2,946,584 2,330,663
Other assets, net ................................................ 2,213,203 1,344,942
Notes receivable ................................................. 703,072 10,099
Goodwill, net .................................................... 352,147 397,927
------------ ------------
TOTAL ASSETS ............................................. $ 29,712,235 $ 20,673,768
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ............................................. $ 1,325,860 $ 2,456,928
Accrued liabilities .......................................... 388,498 593,283
Accrued payroll and related costs ............................ 1,054,368 875,693
Line of credit ............................................... - 4,990,000
Notes payable and capital lease obligations .................. 171,823 205,490
------------ ------------
Total current liabilities ......................... 2,940,549 9,121,394
------------ ------------
Notes payable, capital leases and other long-term
liabilities, net of current portion .......................... 627,603 642,913
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value;
5,000,000 shares authorized; none issued and outstanding
as of June 30, 2000 and December 31, 1999 .............. - -
Common stock, $.01 par value; 40,000,000 shares authorized;
Issued and outstanding 22,143,701 as of June 30, 2000
and 18,074,836 shares as of December 31, 1999 .............. 221,437 180,748
Additional-paid in capital ................................... 52,471,797 36,499,238
Accumulated deficit ...................................... (26,549,151) (25,770,525)
------------ ------------
Total stockholders' equity ............................... 26,144,083 10,909,461
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............... $ 29,712,235 $ 20,673,768
============ ============
</TABLE>
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JMAR TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales .................................. $ 5,167,577 $ 6,769,017 $ 9,966,622 $ 13,464,482
Costs of sales ......................... 3,377,090 4,800,606 6,529,708 9,833,182
------------ ------------ ------------ ------------
Gross profit ....................... 1,790,487 1,968,411 3,436,914 3,631,300
------------ ------------ ------------ ------------
Operating expenses:
Selling, general and
administrative ..................... 1,569,068 1,849,636 3,197,892 3,672,912
Research, development and
engineering ........................ 509,552 373,531 1,048,480 781,492
------------ ------------ ------------ ------------
Total operating expenses ............. 2,078,620 2,223,167 4,246,372 4,454,404
------------ ------------ ------------ ------------
Loss from operations ................... (288,133) (254,756) (809,458) (823,104)
Interest and other income
(expense), net ......................... 105,560 58,254 130,729 73,848
Interest expense ....................... (15,457) (67,451) (99,897) (108,102)
------------ ------------ ------------ ------------
Net loss ............................... $ (198,030) $ (263,953) $ (778,626) $ (857,358)
============ ============ ============ ============
Basic and diluted net loss per share ... $ (.01) $ (.01) $ (.04) $ (.05)
============ ============ ============ ============
Basic and diluted shares used in
computation of net loss per
share .................................. 22,117,686 18,033,781 20,802,005 18,045,180
============ ============ ============ ============
</TABLE>
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JMAR TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30, June 30,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss .................................................... $ (778,626) $ (857,358)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ............................... 477,712 439,367
Services received in exchange for common stock .............. 2,403 4,120
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable, net .................................. (14,572) 647,617
Inventories ............................................... 57,573 218,160
Prepaid expenses and other ................................ (174,658) (37,392)
Other assets .............................................. (51,835) (104,179)
Decrease in:
Accounts payable and accrued liabilities .................. (1,157,178) (1,932,072)
------------ ------------
Net cash used in operating activities ................... (1,639,181) (1,621,737)
------------ ------------
Cash flows from investing activities:
Proceeds from sale of fixed assets .......................... - 338,986
Capital expenditures ........................................ (889,003) (208,993)
Other assets ................................................ (1,100,415) -
Payments received on notes and other receivables ............ 8,706 -
Increase in notes receivable ................................ (692,973) (4,593)
Patent costs ................................................ (32,190) (78,568)
------------ ------------
Net cash provided by (used in) investing activities ..... (2,705,875) 46,832
------------ ------------
Cash flows from financing activities:
Net borrowings (payments) under short-term debt agreements .. (4,990,000) 1,970,000
Net payments of notes payable, capital leases
and other long-term liabilities ................. (48,977) (533,471)
Repurchases of stock ........................................ - (130,824)
Net proceeds from the exercise of options and warrants ...... 16,004,975 7,749
------------ ------------
Net cash provided by financing activities ............... 10,965,998 1,313,454
------------ ------------
Net increase (decrease) in cash and cash equivalents ............ 6,620,942 (261,451)
Cash and cash equivalents, beginning of period .................. 2,323,127 3,848,183
------------ ------------
Cash and cash equivalents, end of period ........................ $ 8,944,069 $ 3,586,732
============ ============
</TABLE>
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JMAR TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of JMAR Technologies, Inc. (the "Company") and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been prepared by
the Company and are unaudited except for the balance sheet as of December 31,
1999. The financial statements have been prepared in accordance with generally
accepted accounting principles, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying consolidated financial statements include all adjustments of a
normal recurring nature which are necessary for a fair presentation of the
results for the interim periods presented. Certain information and footnote
disclosures normally included in financial statements have been condensed or
omitted pursuant to such rules and regulations. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Form 10-K for the
year ended December 31, 1999. The results of operations for the three and six
months ended June 30, 2000 are not necessarily indicative of the results to be
expected for the full year.
(2) INVENTORIES
Inventories are carried at the lower of cost on the first-in, first-out
basis or market and are comprised of materials, direct labor and applicable
manufacturing overhead. At June 30, 2000 and December 31, 1999, inventories
consisted of the following:
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
Raw materials, components and sub-assemblies .. $3,679,032 $4,096,529
Work-in-process ............................... 1,947,681 1,711,753
Finished goods ................................ 569,050 445,054
---------- ----------
$6,195,763 $6,253,336
========== ==========
</TABLE>
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JMAR TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
(3) SEGMENT INFORMATION
The Company's two Segments offer varying products and services that are
affected by different economic conditions. Further, the Segments reflect the
manner in which the Company now views the operating segments.
Microelectronics Equipment Segment: This segment includes the
manufacture, marketing and sale of the Company's measurement and inspection
systems, positioning and motion control systems and biotech processing systems.
This segment also includes the development of the Company's micro-technology
emerging products, including: next-generation X-ray lithography sources and
other non-lithography X-ray systems for inspecting and processing tomorrow's
high-performance microelectronics products; ultra-precision laser machining
systems; and other leading-edge products based on its patented laser technology.
Semiconductor Products and Processes Segment: Using advanced design and
engineering tools and established foundry relationships with semiconductor
producers, this segment is a "fabless" supplier of semiconductors which focuses
on the development and delivery of high-performance custom microcircuits for a
wide range of commercial, medical and military electronics uses. This segment
also provides high value services related to the upgrade and enhancement of a
CMOS (complementary metal-oxide semiconductor) integrated circuit fabrication
facility and related wafer processing technology for the low-volume and
prototype manufacture of electronic circuits used in operational military
systems.
Segment information for the six and three months ended June 30, 2000 and
1999 was as follows:
<TABLE>
<CAPTION>
SEMICONDUCTOR
MICROELECTRONICS PRODUCTS AND
EQUIPMENT PROCESSES CORPORATE TOTAL
---------------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Six Months Ended June 30, 2000:
Revenues $ 7,992,123 $ 1,974,499 $ - $ 9,966,622
Operating loss (689,384) (120,074) - (809,458)
Total assets 15,829,420 4,643,752 9,239,063 29,712,235
Three Months Ended June 30, 2000:
Revenues $ 4,317,420 $ 850,157 $ - $ 5,167,577
Operating loss (198,207) (89,926) - (288,133)
</TABLE>
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JMAR TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
SEMICONDUCTOR
MICROELECTRONICS PRODUCTS AND
EQUIPMENT PROCESSES CORPORATE TOTAL
---------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Six Months Ended June 30, 1999:
Revenues $ 7,884,562 $ 5,579,920 $ - $ 13,464,482
Operating income (loss) (1,046,857) 223,753 - (823,104)
Total assets 14,365,891 4,275,435 2,761,651 21,402,977
Three Months Ended June 30, 1999:
Revenues $ 4,207,832 $ 2,561,185 $ - $ 6,769,017
Operating income (loss) (305,312) 50,556 - (254,756)
</TABLE>
In the tables above, Corporate assets are principally cash, including
the proceeds from the exercise of the Company's publicly traded warrants,
deferred income taxes and other assets.
(4) WARRANT AND OPTION EXERCISES
During the six months ended June 30, 2000, the Company received net
proceeds of approximately $16 million from the exercise of approximately 4.1
million outstanding options and warrants, including its publicly traded
warrants. Of these funds, $4,990,000 was used to pay down the Company's working
capital line of credit.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.
The Company operates in two segments as follows: Microelectronics
Equipment and Semiconductor Products and Processes.
RESULTS OF CONSOLIDATED OPERATIONS
Revenues for the June 30, 2000 quarter were $5,167,577 compared with
$6,769,017 for the three months ended June 30, 1999. Notwithstanding this
decline in revenues, the Company's net loss declined from a net loss of $263,953
for the three months ended June 30, 1999 to a net loss of $198,030 for the three
months ended June 30, 2000. For the six months ended June 30, 2000, revenues
were $9,966,622 compared with $13,464,482 for the six month period ended June
30, 1999. Net loss for the first half of 2000 and 1999 was $778,626 and
$857,358, respectively.
In 1999 the Semiconductor Products and Processes Segment recorded
significant revenue attributable to non-recurring subcontracts related to a
semiconductor fabrication facility for the Defense Microelectronics Activity.
Furthermore, the reassignment of a substantial portion of the Company's
semiconductor engineering staff from government contract chip development work
to internally-funded commercial product development and marketing activities
consistent with the Company's plans to accelerate its entry into the commercial
telecom semiconductor product market resulted in decreased contract revenue in
fiscal 2000.
Gross margins for the six months ended June 30, 2000 and 1999 were 34.5%
and 27.0%, respectively. The higher gross margins for 2000 are primarily due to
an increase in sales of the Company's higher margin precision instrument
products in the Microelectronics Equipment Segment as well as higher margins in
the Semiconductor Products and Processes Segment. The Company continues to
experience competitive pressures on certain precision instrument products, which
may impact gross margins in the future. The Company's Semiconductor Products and
Processes Segment conducted by JSI is in the process of evolving from a lower
profit margin contract development business to a commercial business focused on
the telecommunications products markets. JMAR believes, but can give no
assurance that, as this evolution progresses, a greater proportion of JMAR's
sales will be generated by higher profit margin commercial semiconductor
products. Therefore, to the extent that the Company's commercial semiconductor
products begin to generate a higher percentage of the Company's revenues, the
Company's gross margins should improve. The Company also expects that as its
patented, laser-driven advanced light products enter the marketplace and gain
acceptance, they will also substantially improve gross profit margins.
The Company's operating results in 2000 were also impacted by JMAR's
continuing investments to accelerate the time-to-market for several new
high-performance products for the microelectronics marketplace. These
investments include increased payroll costs with the addition of several senior
technical specialists and managers to direct and help speed the Company's new
precision instrument, laser and X-ray product development programs. As discussed
below, the Company-funded product development expenditures that were expensed
totaled $1,048,480 for the six months ended June 30, 2000 compared to $781,492
for the six months ended June 30, 1999.
Selling, general and administrative ("SG&A") expenses for the three
months ended June 30, 2000 and 1999 were $1,569,068 and $1,849,636,
respectively, and were $3,197,892 and $3,672,912 for the six months ended June
30, 2000 and 1999, respectively. The decrease in SG&A expenses in 2000 is
primarily due to staff and cost reductions in the Microelectronics Equipment
Segment.
The Company's research, development and engineering program (RD&E)
consists of two types: Customer-Funded RD&E (U.S. government and other
companies) and Company-Funded RD&E. Both types of RD&E are expensed when
incurred. Customer-Funded RD&E costs incurred, included in "Costs
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of Sales", totaled $1,065,621 and $944,364 for the three months ended June 30,
2000 and 1999, respectively, and $1,690,274 and $2,382,350 for the six month
periods ended June 30, 2000 and 1999, respectively. The decrease in
Customer-Funded RD&E expenditures for 2000 is related to a decrease due to a
delay in the X-ray lithography program funding provided by the Defense Advanced
Research Projects Agency, most of which is directed toward development of JMAR's
X-ray lithography source technology for the commercial semiconductor market.
This funding was received by the Company late in the second quarter. A further
decrease relates to the Company's contract for the development of a unique
microcircuit architecture and devices for the replacement of obsolete integrated
circuits. The Company believes this latter technology has applicability in both
the government and commercial marketplaces. Company-Funded RD&E costs are shown
in "Operating Expenses" and totaled $509,552 and $373,531 for the three months
ended June 30, 2000 and 1999, respectively, and $1,048,480 and $781,492 for the
six months ended June 30, 2000 and 1999, respectively. Hence, total RD&E
expenditures for the three month periods were $1,575,173 and $1,317,895 for 2000
and 1999, respectively, and $2,738,754 and $3,163,842 for the six month periods
in 2000 and 1999, respectively. In addition to these RD&E expenditures,
capitalized product costs related to the semiconductor chips for commercial
telecommunications applications and capitalized software were $397,344 and
$34,777 for the three months ended June 30, 2000 and 1999, respectively, and
$851,698 and $120,492 for the six months ended June 30, 2000 and 1999,
respectively. Including capitalized product and software costs, RD&E
expenditures as a percentage of sales were 38.2% and 20.0% for the three months
ended June 30, 2000 and 1999, respectively, and 36.0% and 24.4% for the six
months ended June 30, 2000 and 1999, respectively. RD&E expenditures is
primarily related to the continued development of PXS point X-ray sources for
lithography for the semiconductor industry and other metrology applications, the
development of a unique microcircuit architecture and devices for the
replacement of obsolete integrated circuits and for a new family of
telecommunications semiconductor products, the development of new software for
the Company's test and measurement systems and the engineering development of
higher performance test, measurement and inspection systems for the
semiconductor, biomedical and disk drive industries.
Interest expense is significantly less for the second quarter of 2000
versus the second quarter of 1999 due to the payoff of the Company's working
capital line (the "Line") with Comerica Bank in late March 2000. The full
availability of the Line continues in effect and can be drawn down if needed in
the future.
RESULTS OF SEGMENT OPERATIONS
Microelectronics Equipment Segment
Revenue for the three months ended June 30, 2000 as compared to the
three months ended June 30, 1999 for the Microelectronics Equipment Segment
increased $109,588 from $4,207,832 to $4,317,420, or 2.6%. Revenue for the six
month period in 2000 as compared to 1999 for this Segment increased $107,561
from $7,884,562 to $7,992,123, or 1.4%. Due to improved margins, the operating
loss of the Microelectronics Equipment Segment for the three months ended June
30, 2000 as compared to the three months ended June 30, 1999 decreased from a
loss of $305,312 to a loss of $198,207. Operating loss for the six month period
in 2000 as compared to 1999 for this Segment decreased from a loss of $1,046,857
to a loss of $689,384.
Semiconductor Products and Processes Segment
Revenue for the three months ended June 30, 2000 as compared to the
three months ended June 30, 1999 for the Semiconductor Products and Processes
Segment decreased $1,711,028 from $2,561,185 to $850,157, or 66.8%. Revenue for
the six month period in 2000 as compared to 1999 for this Segment decreased
$3,605,421 from $5,579,920 to $1,974,499, or 64.6%. The revenues for 1999
included large one-time subcontracts let in 1999 as discussed above. The
revenues of this Segment in 2000 were impacted by the reassignment of certain
engineering staff from government contract chip development work to
internally-funded commercial product development and marketing activities to
introduce a series of semiconductor chips starting in the third quarter of 2000,
also discussed above. Because of the decrease in revenues, as well as the
build-up of the sales and marketing staff and infrastructure related to the
planned introduction of the Company's new
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commercial semiconductor chips, operating income (loss) for the three months
ended June 30, 2000 as compared to the three months ended June 30, 1999
decreased $140,482 from income of $50,556 to a loss of $(89,926). Operating
income (loss) for the six month period in 2000 as compared to 1999 for this
Segment decreased from income of $223,753 to a loss of $(120,074).
CONSOLIDATED LIQUIDITY AND FINANCIAL CONDITION
Cash and cash equivalents at June 30, 2000 and December 31, 1999 were
$8,944,069 and $2,323,127, respectively. The increase in cash and cash
equivalents for the six months ended June 30, 2000 was $6,620,942. That increase
resulted primarily from the exercise of warrants and options, including the
Company's publicly traded warrants, of $16,004,975 offset in part by cash used
in operations of $1,639,181, the payoff of the Company's working capital bank
line of $4,990,000, an increase in other assets of $1,100,415, capital
expenditures of $889,003 and an increase in notes receivable of $692,973.
JMAR's operations will continue to require the use of working capital.
In the past, the working capital of the Company has generally been funded
through its $5,000,000 working capital line (the "Line") with Comerica Bank (the
"Bank") and through third-party contracts. Although the Company chose to pay off
the outstanding balance of the Line, the availability of the Line is still in
effect. The Line consists of a $5 million primarily formula-based line of
credit. Of that amount, $750,000 is unrestricted with advances on the balance
based on a formula of 80 percent of eligible accounts receivable, 35 percent of
eligible inventories (up to $2.5 million), 50 percent of unbilled revenue on a
long-term contract and up to $500,000 for certain foreign receivables. The Line
contains several covenants relating to, among other matters, the maintenance of
certain minimum income levels and financial ratios, which, if not met by the
Company, could impact the availability of advances pursuant to the Line.
The remaining funds received from the exercise of warrants and options
will be used to accelerate the Company's development of high-value
semiconductors for the rapidly growing Internet and Telecom markets and to
accelerate the development and commercialization of its other high value
proprietary products, as needed. Management believes that the Company has
adequate resources to fund operations and working capital requirements for the
next twelve months based on the current level of operations and business
conditions.
At December 31, 1999, the Company had in excess of $27 million of
Federal net operating loss carryforwards, subject to certain annual limitations,
which expire from 2004 through 2014. To the extent the Company has taxable
income in the future, these carryforwards may be used by the Company to reduce
its cash outlay for taxes.
In April 2000, the Company entered into a series of agreements with Bede
Scientific Instruments Ltd., including a loan of 450,000 British pounds, with
interest accruing at 10% per annum, all due and payable on April 28, 2003. At
June 30, 2000, this loan receivable, including accrued interest, is stated at
$726,003 in the accompanying balance sheet. To the extent the exchange rate
between British pounds and U.S. Dollars changes, the dollar amount of this
receivable will change accordingly.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Certain statements contained in this Form 10-Q which are not related to
historical results, including statements regarding JMAR's future sales or profit
growth, competitive position or products, projects or processes currently under
development and the ability of the Company to successfully introduce those
products into the commercial marketplace or to apply those products, projects or
processes to alternative applications are forward-looking statements that
necessarily are based on certain assumptions and are subject to certain risks
and uncertainties that could cause actual future performance and results to
differ materially from those stated or implied in the forward-looking
statements. These risks and uncertainties include concentration of sales to
certain markets and customers, delays in shipments or cancellations of orders,
failure of expected orders to materialize, fluctuations in margins, timing of
future orders, lack of availability of critical components, customer
reorganizations, failure of advanced technology to perform as predicted,
uncertainties associated with the timing of the funding of government contracts,
fluctuations in demand, delays in development, introduction and acceptance of
new products, changing business and economic conditions in various geographic
regions, technical obsolescence of existing products, technical problems in the
development or modification of current products or manufacturing processes, the
impact
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of competitive products and pricing, shifts in demand for the Company's
products, the degree of success of technology transfer (e.g., advanced
lithography sources, etc.) to commercial products, availability of working
capital to support growth, continued government funding of advanced lithography,
successful integration of acquisitions, other competitive factors and temporary
cessation of operations at one or more of its division facilities due to natural
events such as floods, earthquakes and fires, and other risks detailed in the
Company's Form 10-K for the year ended December 31, 1999, in the Company's Form
8-K filed on February 15, 2000 and in the Company's other filings with the
Securities and Exchange Commission.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable
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PART II - OTHER INFORMATION
Item 2. Changes in Securities
(c)(i) Pursuant to the Board Member Compensation Program adopted by the
Company in August 1997, the Company issued a total of 292 shares of
Common Stock to its outside directors as compensation for services as
directors in May 2000. These transactions were exempt under Section 4(2)
of the Securities Act of 1933.
(ii) In June 2000, the Company issued to Market Broker Relations a
warrant exercisable into 25,000 shares of Common Stock at an exercise
price of $5.00 per share. The warrant was issued pursuant to a
consulting agreement. The warrant was issued in a transaction exempt
under Section 4(2) of the Securities Act of 1933. The warrant expires in
June 2005.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 10.1 Employment Agreement dated April 20, 2000 between
the Company and John H. Carosella.
Exhibit 10.2 Amendment to Bylaws
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the three months
ended June 30, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMAR TECHNOLOGIES, INC.
August 7, 2000 By: /s/ John S. Martinez
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John S. Martinez, Chief Executive Officer
and Authorized Officer
By: /s/ Dennis E. Valentine
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Dennis E. Valentine, Chief Accounting Officer
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