<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------
FORM 10-QSB
-----------
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
- ---- of 1934
For the quarterly period ended June 30, 1997
Transition report under Section 13 or 15(d) of the Securities Exchange Act
- ---- of 1934
For the period from to
-------------- ---------------
Commission file number: 1-11686
CYCOMM INTERNATIONAL INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
Wyoming 54-1779046
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
1420 Springhill Road, Suite 420
McLean, Virginia 22102
(Address of principal executive offices)
(703) 903-9548
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes x No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of August 8, 1997, the Registrant had 9,389,759 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format: Yes No X
--- ---
<PAGE> 2
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
PART I - FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets ..................... 3
Condensed Consolidated Statements of Operations ........... 4
Condensed Consolidated Statements of Cash Flows ........... 5
Condensed Consolidated Statement of Stockholders' Equity .. 6
Notes to Condensed Consolidated Financial Statements ...... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION ......................................... 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS ......................................... 11
ITEM 2. CHANGES IN SECURITIES ..................................... 11
ITEM 3. DEFAULT UPON SENIOR SECURITIES ............................ 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ....... 11
ITEM 5. OTHER INFORMATION ......................................... 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .......................... 12
SIGNATURES ........................................................... 13
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
JUNE 30, DECEMBER 31,
1997 1996
-------------- --------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,607,214 $ 1,220,544
Accounts receivable, net 2,439,574 2,170,518
Inventories 5,866,826 5,819,852
Marketable securities 300,146 ---
Prepaid expenses 49,221 76,785
---------- ---------
Total current assets 10,262,981 9,287,699
---------- ---------
Fixed assets, net 1,658,513 1,663,176
Goodwill, net 1,788,106 1,673,835
Other assets:
Notes receivable 185,812 41,521
Long-term investments --- 513,500
Deferred technology costs, net 14,303 50,227
Deferred financing costs, net 265,699 264,825
Unearned discount 129,631 159,276
Other 220,603 94,699
------------ ------------
816,048 1,124,048
------------ ------------
$ 14,525,648 $ 13,748,758
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable- trade $ 1,771,819 $ 1,871,815
Accrued liabilities 876,342 1,167,337
Due to affiliate 340,959 160,321
Dividends payable on preferred stock --- 86,667
Current portion of capital lease obligations 43,622 81,527
Revolving credit facility 1,691,688 1,138,933
Current portion of notes payable and convertible
debentures 579,999 329,401
--------- ---------
Total current liabilities 5,304,429 4,836,001
--------- ---------
Capital lease obligations 56,256 71,869
Convertible debentures 3,000,000 3,074,999
Deferred credit 105,718 620,466
Stockholders' equity:
Common Stock, no par value, unlimited authorized shares,
9,389,759 and 8,050,401 shares issued and outstanding
at June 30, 1997 and December 31, 1996 46,527,670 42,970,749
Accumulated deficit (40,468,425) (37,825,326)
------------ ------------
Total stockholders' equity 6,059,245 5,145,423
------------ ------------
$ 14,525,648 $ 13,748,758
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30, 1997 AND MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
JUNE 30, MAY 31, JUNE 30, MAY 31,
1997 1996 1997 1996
------------ ------------- ------------ ----------------
(Restated - Note 1) (Restated - Note 1)
<S> <C> <C> <C> <C>
Sales $ 3,408,977 $ 3,808,625 $ 7,033,684 $ 4,132,608
Cost of sales 2,437,669 3,019,692 4,953,094 3,185,956
--------- --------- --------- ---------
Gross profit 971,308 788,933 2,080,590 946,652
--------- --------- --------- ---------
Expenses
Selling, general and administrative 1,767,225 2,400,490 3,293,439 3,787,865
Research and product development 320,846 255,358 548,300 459,982
Depreciation and amortization 179,180 817,444 370,003 951,728
Foreign exchange loss (gain) (5,368) 796 (3,117) 1,091
Write-down of inventories to net
realizable value --- 865,572 --- 865,572
---------- ----------- ----------- -----------
2,261,883 4,339,660 4,208,625 6,066,238
---------- ----------- ----------- -----------
LOSS FROM OPERATIONS (1,290,575) (3,550,727) (2,128,035) (5,119,586)
OTHER INCOME (EXPENSE)
Interest income 24,086 13,143 35,903 43,358
Interest expense (256,450) (730,064) (583,122) (1,371,041)
Gain (loss) on sale of fixed assets --- (16,125) --- (16,125)
Unrealized holding gain on marketable
securities 32,155 --- 32,155 ---
Other income --- 1,870 --- 2,897
------------ ----------- ----------- -----------
(200,209) (731,176) (515,064) (1,340,911)
------------ ----------- ----------- -----------
NET LOSS $ (1,490,784) $(4,281,903) $(2,643,099) $(6,460,497)
============ =========== =========== ===========
LOSS PER SHARE
Net loss per share $(0.16) $(.90) $(0.30) $(1.47)
====== ====== ====== ======
Weighted average number of common
shares outstanding 9,274,994 4,744,253 8,858,879 4,404,589
========= ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30, 1997 AND MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------
JUNE 30, MAY 31,
1997 1996
----------- ------------
(Restated - Note 1)
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(2,643,099) $(6,460,497)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 370,003 951,728
Loss (gain) on sale of fixed assets --- 16,125
Unrealized holding gain on marketable securities (32,155) ---
Provision for product warranty --- 9,049
Write-down of inventories --- 865,572
Non-cash expenses 400,479 1,368,380
Research and product development 35,924 92,166
Change in operating assets and liabilities (713,107) 906,728
----------- ----------
Cash used in operating activities (2,581,955) (2,250,749)
----------- ----------
INVESTING ACTIVITIES
Acquisition of fixed assets (206,918) (67,469)
Proceeds on disposal of fixed assets 35,590 61
Increase in long-term investment (205,000) ---
Decrease in long-term investment 513,500 ---
Acquisition, net of cash acquired, XLCC --- (2,150,000)
Increase in notes receivable (184,000) (20,000)
Decrease in notes receivable 41,521 1,427
Acquisition of patents --- (25,000)
Other (125,904) 30,466
-------- ----------
Cash used in investing activities (131,211) (2,230,515)
-------- ----------
FINANCING ACTIVITIES
Borrowings under revolving credit facility 552,755 ---
Borrowings under notes payable --- 8,303
Repayment of notes payable and convertible debentures (99,401) (155,408)
Borrowings under convertible debentures 3,000,000 7,025,000
Deferred financing costs on convertible debentures (300,000) (702,500)
Repayment - capital leases (53,518) (4,639)
--------- ---------
Cash provided by financing activities 3,099,836 6,170,756
--------- ---------
Increase in cash and cash equivalents during the period 386,670 1,689,492
Cash and cash equivalents, beginning of period 1,220,544 787,775
--------- ---------
Cash and cash equivalents, end of period $1,607,214 $2,477,267
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 129,601 $ 32,128
Income taxes paid $ --- $ ---
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of convertible debentures to common stock $2,618,961 $4,230,549
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PREFERRED PREFERRED COMMON COMMON ACCUMULATED
SHARES STOCK SHARES STOCK DEFICIT
---------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, MAY 31, 1996 15,000 $1,500,000 5,943,771 $35,743,536 $(31,293,056)
Net loss (6,491,603)
Issuance of common stock:
Conversion of debentures 1,393,186 3,911,880
Conversion of preferred stock (15,000) (1,500,000) 400,000 1,500,000
Private placement 195,331 530,100
Exercise options 100,000 300,000
Acquisition earn-out 18,113 90,020
Beneficial conversion feature of
convertible debt 895,213
Dividends on preferred stock (40,667)
---------- ------------ ---------- ----------- -------------
BALANCE, DECEMBER 31, 1996 --- --- 8,050,401 42,970,749 (37,825,326)
Net loss (2,643,099)
Issuance of common stock:
Conversion of debentures 1,147,062 2,618,961
Acquisition earn-out 180,975 567,126
Issued in payment for services 11,321 37,501
Beneficial conversion feature of
convertible debt 333,333
---------- ------------ ---------- ----------- -------------
BALANCE, JUNE 30, 1997 --- $ --- 9,389,759 $46,527,670 $(40,468,425)
========== ============ ========== =========== =============
</TABLE>
See accompanying notes to condensed consolidated financial statements
6
<PAGE> 7
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1 - GENERAL
The interim financial information furnished herein was prepared from the books
and records of Cycomm International Inc. and its subsidiaries (the "Company")
as of June 30, 1997 and for the period then ended, without audit; however, such
information reflects all normal and recurring accruals and adjustments which
are, in the opinion of management, necessary for a fair presentation of
financial position and of the statements of operations and cash flows for the
interim period presented. The interim financial information furnished herein
should be read in conjunction with the consolidated financial statements
included in this report and the consolidated financial statements and notes
contained in the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996. The interim financial information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
The Company has changed its fiscal year end from May 31 to December 31
effective December 31, 1996. Accordingly, the results of operations for the
six months ended June 30, 1997 are compared to the most applicable period from
the previous fiscal year which is the six months ended May 31, 1996.
The Company has restated its May 31, 1996 financial statements to recognize a
recently announced position by the staff of the Securities and Exchange
Commission regarding the accounting for the issuance of debt that can be
converted at a discount to the market price of the Company's common stock. In
this regard, the implicit return provided by the conversion terms of the debt
is accounted for as additional interest expense and accreted over the period
between the date of issuance of the debt and the date the debt first becomes
convertible. This prior period adjustment resulted in additional non-cash
interest expense of $1,193,379 in the six months ended May 31, 1996 or $0.27
per share.
NOTE 2 - INVENTORIES
The following is a summary of inventories at June 30, 1997 and December 31,
1996:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
Raw materials $4,316,816 $3,859,242
Work in process and sub-assemblies 1,162,773 1,593,705
Finished goods 387,237 366,905
---------- ------------
$5,866,826 $5,819,852
========== ============
</TABLE>
NOTE 3 - NOTES PAYABLE AND CONVERTIBLE DEBENTURES
The Company's wholly-owned subsidiaries, XL Computing and XL Canada, have
obtained revolving credit facilities with banks. These credit facilities allow
XL Computing and XL Canada to borrow and repay amounts, at their option, up to
a maximum aggregate amount of approximately $2,000,000. The credit facilities
are collateralized by XL Computing's and XL Canada's inventory
7
<PAGE> 8
CYCOMM INTERNATIONAL INC. AND SUBSIDIARIES
and trade accounts receivable, and are guaranteed by the Company. At June 30,
1997, the outstanding balance on the revolving credit facilities was
$1,691,688.
On February 28, 1997, the Company issued $3.0 million of 10% convertible
debentures due February 28, 1999 which are convertible at the option of the
holders into common stock of the Company at a conversion price equal to 90% of
the average closing bid price of the Company's common stock prior to
conversion, provided; however, that the conversion price shall in no event be
greater than $6.00 per share or less than $3.00 per share. The debentures are
fully eligible for conversion after February 28, 1998.
As of June 30, 1997, the Company has outstanding $3,349,999 in convertible
debentures which are convertible at the option of the holders into common stock
of the Company at prices ranging from 79% to 90% of the average closing bid
price of the Company's common stock prior to conversion. At June 30, 1997, an
amount of $1,099,999 in convertible debentures are fully eligible for
conversion. During the six months ended June 30, 1997, principal and accrued
interest in the amount of $2,837,698 were converted into 1,147,062 shares of
common stock.
NOTE 4 - MARKETABLE SECURITIES
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
115 "Accounting for Certain Investments in Debt and Equity Securities". At
June 30, 1997, the Company's marketable securities are classified as trading
securities as defined by SFAS No. 115, and are stated at market value.
Unrealized gains and losses on such securities are reflected in net earnings.
The cost, gross unrealized holding gains and fair value of the marketable
securities are as follows:
<TABLE>
<CAPTION>
June 30,
1997
--------
<S> <C>
Cost $267,991
Gross unrealized holding gains 32,155
--------
Fair value $300,146
========
</TABLE>
NOTE 5 - RECENT PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share", which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact is not expected
to result in a change in primary earnings per share for the periods ended June
30, 1997 and May 31, 1996, as the effect of these changes would be
anti-dilutive. The impact of Statement No. 128 on the calculation of fully
diluted earnings per share for these periods is also expected to be
anti-dilutive.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 and May 31, 1996
Total revenues for the three months ended June 30, 1997 were $3,408,977 which
represent a decrease of 10% over revenues of $3,808,625 for the prior period.
Revenues from the computer products segment were $2,839,870 in the current
period reflecting a decrease of 16% from the prior period revenues of
$3,396,294. The decrease reflects reduced revenues in the TEMPEST line of
computers offset by the increased sales volume of the PCMobile computer.
Cost of sales for the three months ended June 30, 1997 was $2,437,669 as
compared to cost of sales of $3,019,692 for the prior period. The decrease is
related to reduced sales volumes at XL Computing offset by increased sales
volume at XL Canada. These subsidiaries, which form the computer products
segment, contributed $2,142,743 to total cost of sales which resulted in a
gross margin of 25% for sales in this segment, an increase from a gross of
margin of 18% in the prior period. The gross margin for sales in the
communications security products segment was 48%, as compared to 41% in the
prior period.
In connection with the Company's goal of achieving profitable operations, the
Company experienced a 49% decrease in operating expenses. Operating expenses
decreased to $2,261,883 for the three months ended as compared to $4,399,660
for the prior period. Selling, general and administrative expenses decreased
to $1,767,225 for the period ended June 30, 1997 as compared to $2,400,490 from
the prior period. This decrease is due in part to the effects of restructuring
of the communications security products segment. Research and development
costs increased 26% to $320,846 for the period ended June 30, 1997. This
increase reflects the Company's expenditures on the enhancements on the TEMPEST
line of computers and the development of the PCMobile computer. Depreciation
and amortization decreased 78% to $179,180 for the three months ended June 30,
1997 and reflects acceleration of goodwill amortization of $501,523 in the
prior period. Additionally, the Company recorded inventory write-downs of
$865,572 in the prior period related to the obsolescence of certain
communications security products.
Interest expense for the three months ended June 30, 1997 was $256,450 as
compared to $730,064 for the prior period. While there has been increased debt
financing obtained by the Company in the form of convertible debentures,
acquisition debt and credit lines, the interest expense has decreased due to
reduced convertible debt interest charges. Included in interest expense are
non-recurring, non-cash charges related to convertible debt financing that give
effect to beneficial conversion features of $145,833 and $576,553 for the three
months ended June 30, 1997 and the three months ended May 31, 1996,
respectively.
The net loss of $1,490,784, or ($0.16) per share, for the three months ended
June 30, 1997 represents a decrease from $4,281,903, or ($.90) per share for
the three months ended May 31, 1996. The decrease in net loss is largely due
to the results of the restructuring plans and the write-downs of inventory and
goodwill recorded in the prior period.
9
<PAGE> 10
Six Months Ended June 30, 1997 and May 31, 1996
Total revenues for the six months ended June 30, 1997 were $7,033,684 which
represents an increase of 70% over revenues of $4,132,608 for the prior period.
The increased revenues are partly related to the inclusion of the revenues of
XL Computing and XL Canada acquired in March 1996 and June 1996, respectively.
These subsidiaries accounted for $5,948,151, or 85% of total revenues for the
current period. The remaining revenue of $1,085,533 related to the
communications security products segment and reflected an approximate 47%
increase from the prior period. The increase is due to the shipments of the
CSD Slice products to Lucent Technologies.
Cost of sales for the six months ended June 30, 1997 was $4,953,094 as compared
to cost of sales of $3,185,956 for the prior period. The increase is related
to the acquisitions of XL Computing and XL Canada. These subsidiaries, which
form the computer products segment, contributed $4,323,157 to total cost of
sales which resulted in a gross margin of 27% for sales in this segment. The
gross margin for sales in the communications security products segment was 42%,
as compared to 44% in the prior period. The decrease in gross margin in the
communications products segment is due to the sale of written down products in
the prior period.
In connection with the Company's goal of achieving profitable operations, the
Company experienced a 31% decrease in operating expenses despite the inclusion
of the results of its acquisitions of XL Computing and XL Canada. Operating
expenses decreased to $4,208,625 for the six months ended as compared to
$6,066,238 for the prior period. Selling, general and administrative expenses
decreased to $3,293,439 for the period ended June 30, 1997 as compared to
$3,787,865 from the prior period. This decrease is due in part to the effects
of restructuring of the communications security products segment. Research and
development costs increased 19% to $548,300 for the period ended June 30, 1997.
This increase reflects the Company's expenditures on the enhancements on the
TEMPEST line of computers and the development of the PCMobile computer.
Current year research and development costs also reflect a credit of $206,000
relating to the reversal of certain expenses recorded in the prior year related
to the development of the CSD cellular security device. Depreciation and
amortization decreased 61% to $370,003 for the six months ended June 30, 1997
and reflects the acceleration of goodwill amortization of $501,523 in the prior
period. Additionally, the Company recorded inventory write-downs of $865,572
in the prior period related to the obsolescence of certain communications
security products.
Interest expense for the six months ended June 30, 1997 was $583,122 as
compared to $1,371,041 for the prior period. While there has been increased
debt financing obtained by the Company in the form of convertible debentures,
acquisition debt and credit lines, the interest expense has decreased due to
reduced convertible debt interest charges. Included in interest expense are
non-recurring, non-cash charges related to convertible debt financing that give
effect to beneficial conversion features of $362,978 and $1,193,379 for the six
months ended June 30, 1997 and the six months ended May 31, 1996, respectively.
The net loss of $2,643,099, or ($0.30) per share, for the six months ended June
30, 1997 represents a decrease from $6,460,497, or ($1.47) per share for the
six months ended May 31, 1996. The decrease in net loss in largely due to the
results of the restructuring plans and the write-downs of inventory and
goodwill recorded in the prior period.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
The Company has satisfied working capital requirements through cash on hand,
available lines of credit and various equity related financings. At June 30,
1997, the Company had cash, cash equivalents and marketable securities of
$1,907,360.
In the six months ended June 30, 1997, cash used in operations amounted to
$2,581,955. Investing activities used cash of $131,211 during the six months
ended June 30, 1997, the major activity being the sale of the Company's
investment in Galactica for $1,027,000, of which $513,500 was paid in cash at
closing. This amount was offset by capital expenditures, the investment in
Delta Data for $205,000 and an increase in notes receivable. Cash provided by
financing activities was $3,099,836. The issuance of convertible debentures
resulted in net proceeds of $2,700,000. The Company increased the amounts
drawn on its revolving credit facilities in an amount of $552,755 during the
six months ended June 30, 1997.
The Company's net working capital increased to $4,958,550 at June 30, 1997,
from $4,451,698 at December 31, 1996, as funds were raised to make acquisitions
and fund working capital needs.
The Company expects its secure, rugged computer segment to be able to fund
operations from working capital, secured lines of credit and funding from the
parent company. The operations of the secure communications products segment
have improved through the results of certain restructurings; accordingly, this
business segment will require only minimal financing through funding from the
parent company. As compared to prior periods, the Company has shown revenue
growth while narrowing losses. The Company anticipates continued improvement
to achieve profitability in the near term. The Company believes that it has
the capital resources available through existing cash, operations and the
ability to raise additional debt and equity financings to develop and market
its products and to make acquisitions. In this regard, the Company believes
that it will be able to meet its obligations. There can, however, be no
assurance that the above will be successfully accomplished, or will be possible
on terms acceptable to the Company.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On June 6, 1997, the Company held its Annual Meeting of Stockholders in McLean,
Virginia pursuant to the Notice of Annual Meeting and related Proxy Statement
dated May 1, 1997. As follows are the actions that were taken at the meeting:
11
<PAGE> 12
1. To elect Albert I. Hawk, Rick E. Mandrell, Hubert Marleau and Thomas
Stafford as directors for one-year term expiring in 1998. The results of
the voting were as follows:
<TABLE>
Nominee For Withheld
---------------- ------------ --------------
<S> <C> <C>
Albert I. Hawk 7,637,620 89,648
Rick E. Mandrell 7,638,450 89,648
Hubert Marleau 7,638,450 89,648
Thomas Stafford 7,638,450 89,648
</TABLE>
2. To approve the selection of Ernst & Young, LLP., as independent certified
public accountants for the 1997 fiscal year. The results of the voting
were as follows:
<TABLE>
For Against Withheld
-------- ---------------- --------
<S> <C> <C>
7,677,752 -- 40,318
</TABLE>
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
None.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CYCOMM INTERNATIONAL INC.
Date: August 14, 1997 /s/ Albert I. Hawk
------------------------
Albert I. Hawk
President and
Chief Executive Officer
Date: August 14, 1997 /s/ Michael R. Skoff
------------------------
Michael R. Skoff
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,607,214
<SECURITIES> 300,146
<RECEIVABLES> 2,636,956
<ALLOWANCES> (11,570)
<INVENTORY> 5,866,826
<CURRENT-ASSETS> 10,262,981
<PP&E> 3,470,732
<DEPRECIATION> 1,812,219
<TOTAL-ASSETS> 14,525,648
<CURRENT-LIABILITIES> 5,304,429
<BONDS> 5,271,687
0
0
<COMMON> 46,527,670
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,525,648
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<INTEREST-EXPENSE> 256,450
<INCOME-PRETAX> (1,490,784)
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<INCOME-CONTINUING> (1,490,784)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,490,784)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
