<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
-------------
Commission File Number 0-22472
-------
ADAPTIVE SOLUTIONS, INC.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Oregon 93-0981962
_______________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 N.W. Compton Drive, Suite 340, Beaverton, OR 97006
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(503) 690-1236
_______________________________________________________________________________
(Registrant's telephone number, including area code)
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 requirements for the past 90 days.
[X ] Yes [ ] No
Number of shares of common stock outstanding as of
June 30, 1996:
6,876,951 shares, no par value
------------------------------
<PAGE> 2
ADAPTIVE SOLUTIONS, INC.
Index to Form 10-Q
PART I FINANCIAL INFORMATION Page No.
- ---------------------------- --------
Item 1. Financial Statements
Balance Sheets as of
June 30, 1996 and December 31, 1995 3
Statements of Operations for the
three months and six months ended June 30, 1996 and 1995 4
Statements of Cash Flows for the
six months ended June 30, 1996 and 1995 5
Notes to Condensed Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-13
PART II OTHER INFORMATION
- -------------------------
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14-15
SIGNATURES 16
- ----------
<PAGE> 3
ADAPTIVE SOLUTIONS, INC.
BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,487 $ 974
Trade accounts receivable, net 1,180 4,220
Inventory, net 2,235 2,885
Prepaid expenses 134 381
Total current assets 8,036 8,460
Property and equipment - net 1,626 1,754
Other assets 100 7
$ 9,762 $ 10,221
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58 $ 825
Line of credit 554 0
Accrued expenses 2,039 1,209
Current portion of capital lease
obligations 451 476
Deferred revenue 47 67
Total current liabilities 3,149 2,577
Capital lease obligations, less current portion 506 496
Stockholders' equity:
Common stock, no par value. Authorized 30,000
shares; issued and outstanding 6,877 shares
and 6,014 shares at June 30, 1996 and
December 31, 1995, respectively 31,068 28,674
Unearned compensation 0 (17)
Accumulated deficit (24,961) (21,509)
Total stockholders' equity 6,107 7,148
$ 9,762 $ 10,221
See accompanying notes to condensed financial statements.
</TABLE>
3
<PAGE> 4
ADAPTIVE SOLUTIONS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUE:
Net product revenue $ 976 $ 654 $ 4,327 $ 1,156
Research and development
revenue 507 309 987 605
------- ------- ------- -------
TOTAL REVENUE 1,483 963 5,314 1,761
OPERATING COSTS AND EXPENSES
Cost of product revenue 1,262 924 3,396 1,253
Research and development 880 961 1,811 1,705
Sales and marketing 538 944 1,350 1,606
General and administrative 1,740 260 2,227 497
------- ------- ------- -------
TOTAL OPERATING COSTS AND
EXPENSES 4,420 3,089 8,784 5,061
------- ------- ------- -------
OPERATING LOSS (2,937) (2,126) (3,470) (3,300)
Interest income 53 40 80 93
Interest expense (21) (94) (62) (105)
------- ------- ------- -------
NET LOSS $(2,905) $(2,180) $(3,452) $(3,312)
======= ======= ======= =======
Net loss per common
and common equivalent
share $ (0.43) $ (0.41) $ (0.53) $ (0.64)
======= ======= ======= =======
Weighted average common
and common equivalent
shares outstanding 6,763 5,363 6,519 5,215
======= ======= ======= =======
See accompanying notes to condensed financial statements.
</TABLE>
4
<PAGE> 5
ADAPTIVE SOLUTIONS, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,452) $(3,312)
Adjustments to reconcile net loss to
cash used by operating activities:
Depreciation and amortization 284 259
Amortization of unearned compensation 17 21
Changes in assets and liabilities:
Trade accounts receivable 3,040 (141)
Inventory 650 (934)
Prepaid expenses and other assets 247 29
Accounts payable (767) 113
Accrued expenses 830 113
Deferred revenue (20) (1)
------- -------
Net cash provided/used by
operating activities 829 (3,853)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (155) (759)
Purchase of other assets (93)
------- -------
Net cash used in investing activities (248) (759)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 2,394 3,212
Proceeds from (payments on) capital lease obligations (16) 543
Proceeds from line of credit 554 0
------- -------
Net cash provided by (used in)
financing activities 2,932 3,755
------- -------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 3,513 (857)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 974 4,991
------- -------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 4,487 $ 4,134
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION -
Cash paid for interest $ 62 $ 105
======= =======
See accompanying notes to condensed financial statements.
</TABLE>
5
<PAGE> 6
ADAPTIVE SOLUTIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In thousands, except per share data)
Basis of Presentation
The accompanying condensed financial statements have been prepared by the
Company without audit and in conformity with generally accepted accounting
principles for interim financial information. Accordingly, certain financial
information and footnotes have been omitted or condensed, therefore, these
financial statements should be read in conjunction with the Company's 1995
annual report to stockholders filed with the Securities and Exchange
Commission. In the opinion of management, the condensed financial statements
include all necessary adjustments (which are of a normal and recurring nature)
for the fair presentation of the results of the interim periods presented. The
results of operations for the six months ended June 30, 1996 are not
necessarily indicative of the results for the entire fiscal year ending
December 31, 1996.
Inventories
Inventories are valued at the lower of cost or market with cost determined on
the average cost method. The components of inventories are as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
(unaudited)
<S> <C> <C>
Finished goods $ 54 $ 204
Work in process 30 342
Raw materials 2,598 2,486
Reserve for obsolete inventory (447) (147)
------- -------
$ 2,235 $ 2,885
======= =======
</TABLE>
Income Taxes
The Company has net operating loss and unused research and experimentation
credit carryforwards available for income tax purposes. These carryforwards
expire in 2003 through 2008.
The Company's ability to use its net operating loss carryforwards to offset
future taxable income is subject to annual restrictions contained in the United
States Internal Revenue Code of 1986, as amended (the Code). These
restrictions act to limit the Company's future use of its net operating losses
following certain substantial stock ownership changes enumerated in the Code
and referred to hereinafter as an "ownership change".
6
<PAGE> 7
The Company's initial public offering in November 1993 created an ownership
change that has resulted in the net operating loss carryforwards being limited
to approximately $660 per year. In addition, approximately $620 of net
operating losses are further limited to approximately $145 per year due to
changes in the Company's ownership structure during 1990.
Since the Company's initial public offering in November 1993, the Company has
sold 3,128 shares of common stock. The Company has not yet determined the
impact, if any, of the sale of such shares on the availability of net operating
loss carryforwards.
Commitments
The Company purchases some of its inventory through the use of letters of
credit. At June 30, 1996, the Company has no outstanding letters of credit.
Such letters of credit are backed by a line of credit.
Net Loss Per Common and Common Equivalent Share
Net loss per share is computed using the weighted average number of common and
dilutive common equivalent shares assumed to be outstanding during the period.
Outstanding options and warrants are assumed not to be common stock equivalents
due to the reported net losses.
Line of Credit
The Company utilizes a secured operating line of credit agreement for the
purpose of supporting short-term working capital needs. The line carries an
interest rate equal to prime plus 1.50%. Any amount drawn under the line
becomes due in January 1997. The maximum amount available under the line is
$1,500, of which $554 has been drawn as of June 30, 1996. The line is secured
by accounts receivable.
Restructuring
In June 1996, the Company announced significant changes in its organization
structure and in its product strategy. The Company recorded costs of $2,043
associated with these changes in the second quarter of 1996. The primary
components of this one-time charge included employment termination costs, lease
termination costs and reserves for inventory and property and equipment.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report on Form 10-Q contains forward-looking statements (identified with
an asterisk ("*")) that involve risks and uncertainties. The Company's actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth in this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".
Overview
The Company was incorporated in 1988 and first shipped products in 1993. The
Company has been engaged in the development of its products and has incurred
significant operating losses through June 30, 1996. As of June 30, 1996, the
Company had an accumulated deficit of $24,961,000. For the six months ended
June 30, 1996, the Company incurred a net loss of $3,452,000.
The Company recently announced significant changes in its organizational
structure and in its product strategy. Under the revised strategy, the Company
will combine its proprietary CNAPS parallel microprocessor capabilities with
products based on emerging mainstream parallel processing chips from companies
such as Intel and Motorola. This will involve the continuing internal
development of software and the development of external partnerships to
complete the products. The Company plans to be able to provide customers with
a broader range of optimized forms processing solutions with this strategy. In
order to become profitable, the Company must successfully develop these new
products, obtain market acceptance for the products, obtain design wins for
incorporation of its board level products into developers' OEM systems, develop
sufficiently high sales volumes and manufacturing efficiencies, manage its
operating expenses and expand its distribution capability.* There can be no
assurance that the Company will meet any of these objectives or achieve
profitability. The Company expects that operating losses will continue in 1996
and possibly beyond.
The Company expects that revenues will fluctuate substantially from quarter to
quarter and will be difficult to forecast. The absence of significant backlog
will also limit the Company's ability to plan production and inventory levels.
These factors could lead to substantial fluctuations in operating results. In
addition, due to the complexity of massively parallel processing, the Company
has a long sales cycle for its products. The timing of new orders for these
products could lead to substantial fluctuations in operating results.
Operating results may also fluctuate based upon other factors, including, but
not limited to, cancellation or rescheduling of orders, currency fluctuations,
seasonal fluctuations in business activity, product announcements by the
Company or its competitors or changes in pricing policies by the Company, its
competitors or its suppliers.
8
<PAGE> 9
Because the Company's future operating results will depend upon sales of its
board level products to OEM application developers for incorporation into their
systems, factors affecting such OEMs, including the timing of new orders for
their products, general market acceptance of such products or product
announcements by such developers, could cause variability in the Company's
operating results. In addition, the Company intends to devote significant
resources to research and development associated with new products. Once the
expenditure of such resources is planned, it may be difficult to reduce them
quickly if funds are limited. The Company's ability to reduce operating
expenses, especially over the short term, is therefore limited. The Company
may therefore be unable to adjust spending in a timely manner to compensate for
any unanticipated shortfall in revenues. Accordingly, any significant
shortfall in revenues in any quarter, regardless of the cause of such
shortfall, would have an almost immediate adverse impact on the Company's
operating results and on the Company's ability to achieve and maintain
profitability.
Under its revised product strategy, the Company will continue production of its
CNAPS chips for use in its products until a complete migration to commercially
available mainstream parallel processing chips can be achieved. The Company
does not manufacture the semiconductor wafers used for the CNAPS chips included
in its products. Wafer capacity in the semiconductor industry is currently
limited. Any increase in demand for wafers over currently expected levels or
any failure of wafer supply in the industry to grow at anticipated rates would
magnify any potential shortages of chips. To date, the Company has not been
able to negotiate long-term supply agreements with its wafer manufacturers or
its future suppliers mainstream parallel processing chips. There can be no
assurance that the Company's wafer manufacturers or chip suppliers will
allocate sufficient capacity to the Company to meet its demand. If the Company
were unable to obtain adequate supplies of wafers and chips on a timely basis,
its financial position and results of operations would be materially and
adversely affected.
Revenues
Net product revenue for the three months and six months ended June 30, 1996 of
$976,000 and $4,327,000, respectively, consisted of the sale of CNAPS
development systems, boards, software and maintenance agreements and PowerShop
boards and software. Revenue from the development systems and boards and
Powershop products is recognized at the time of product shipment. Revenue from
the software and maintenance agreements is deferred and recognized over the
life of the agreement. Net product revenue for the comparable periods in 1995
was $654,000 and $1,156,000, respectively.
The Company's future success and its ability to continue operations will depend
in substantial part on its ability to significantly maintain and increase sales
of its existing products and products to be developed under its revised product
strategy.* Although the Company has agreements with various OEMs, none of
these agreements include minimum purchase commitments. There can be no
assurance that the Company will be able to generate significant additional
sales or maintain sales at current or historical levels; failure to do so would
have a material adverse effect on the Company's financial position and results
of operations.
9
<PAGE> 10
Research and development revenue for the three months and six months ended June
30, 1996 was $507,000 and $987,000, respectively. For the comparable periods
in 1995, research and development revenue was $309,000 and $605,000,
respectively. Research and development revenue for the six months ended June
30, 1996 was generated primarily from technology development contracts with the
U.S. Government and a major U.S. microprocessor company. Research and
development revenue for the six months ended June 30, 1995 was largely
attributable to technology development contracts with the U.S. Government.
Revenues from research and development contracts are expected to decrease in
future periods due to the substantial completion of existing contracts and the
absence of new contracts. Accordingly, the Company's revenues in future
periods will be dependent upon the Company's success in increasing product
sales, as to which there can be no assurance.
International sales totaled $147,000 (10% of total revenue) for the three
months ended June 30, 1996 and $738,000 (14% of total revenue) for the six
months ended June 30, 1996. For the comparable periods in 1995, international
sales were $126,000 (22% of total revenue) and $334,000 (27% of total revenue),
respectively. The percentage of international revenues to total revenues has
decreased as the Company's sales volume over a larger base of customers has
increased.
Foreign regulatory bodies often establish technical standards different from
those in the United States; while the Company tests its products to meet these
standards, there can be no assurance that the Company's products will comply
with such standards in the future. The Company's international sales and
operations may also be materially adversely affected by the imposition of
governmental controls, export license requirements, restrictions on the export
of critical technology, political and economic instability, trade restrictions,
changes in taxes, varying exchange rates, difficulties in establishing and
managing international operations and general economic conditions. Compliance
or noncompliance with international quality standards may also affect operating
results. In this respect, the Company has not applied for and has no present
plans to apply for ISO 9000 certification.
Cost of Product Revenue
The cost of product revenue for the three months and six months ended June 30,
1996 was $1,262,000 and $3,396,000, respectively. For 1995, the cost of
product revenue for the similar periods was $924,000 and $1,253,000,
respectively. The cost of product revenue consists of direct manufacturing
costs, overhead costs associated with the manufacturing operations in
Beaverton, Oregon and Sunnyvale, California, provisions for warranty costs, and
reserves for inventory obsolescence and return. The increase in cost from the
prior year was due to the increase in sales volume in 1996 and to costs
totalling $541,000 associated with the Company's change in organizational
structure and revised product strategy.
10
<PAGE> 11
Cost of product revenue could be negatively affected in future periods due to a
number of factors, including problems with component supplies, variability of
component cost, product quality or reliability problems or other factors. In
addition, the Company purchases many of its components from Japanese
manufacturers and pricing for these components is generally in yen. When the
value of the yen increases relative to the dollar, the cost to the Company of
these components increases correspondingly. Accordingly, future increases in
the value of the yen relative to the dollar could adversely affect the
Company's gross margins or make the prices of the Company's products less
competitive.
Research and Development Expenses
Research and development expenses of $880,000 and $1,811,000 for the three
months and six months ended June 30, 1996, respectively, were associated with
the continuing support of enhancements to the Company's existing products, the
development of the CNAPS/PCI board, the continued development of the PowerShop
accelerator product and the development of the Company's next-generation
processor. Research and development expenses were $961,000 and $1,705,000,
respectively, for the comparable periods in 1995. In connection with the
change in the Company's product strategy, further development of the PowerShop
product and the next-generation processor will be discontinued. The research
and development focus will be shifted toward forms processing solutions
utilizing emerging mainstream parallel processing chips. Included in the
amount for the three months and six months ended June 30, 1996 are costs
totalling $119,000 associated with the Company's change in organizational
structure and revised product strategy.
The Company believes that a significant investment in research and development
is critical to its future success. To the extent permitted by its liquidity
position, the Company plans to invest substantial resources in research and
development. If resource constraints cause the Company to allocate resources
away from its research and development activities, the Company's future
financial position and results of operations could be adversely affected.
Sales and Marketing Expenses
Sales and marketing expenses for the three months and six months ended June 30,
1996 were $538,000 and $1,350,000, respectively. For the comparable periods in
1995, sales and marketing expenses were $944,000 and $1,606,000, respectively.
Sales and marketing expenses are primarily comprised of labor costs, sales
commissions, advertising and promotion, and customer literature. Commissions
generally vary with sales volume. The level of spending for advertising,
promotion, and literature costs is largely dependent on the level of promotion
for new products. The decrease in sales and marketing expenses from the prior
year consists of an increase in commissions, coincident with the increase in
sales volume, offset by decreases in advertising, promotion, travel, and sales
samples. Also included in the amount for the three months and six months ended
June 30, 1996 are costs totalling $12,000 associated with the Company's change
in organizational structure and revised product strategy.
11
<PAGE> 12
The Company believes that effective sales and marketing activities are critical
to any future growth in sales; accordingly, if resource constraints cause the
Company to allocate resources away from these activities, the Company's future
financial position and results of operations could be adversely affected.
General and Administrative Expenses
General and administrative expenses for the three months and six months ended
June 30, 1996 were $1,740,000 and $2,227,000, respectively. For the comparable
periods in 1995, general and administrative expenses were $260,000 and
$497,000, respectively. The primary components of these expenses are salaries,
insurance and fees related to legal, accounting and consulting services. The
increased level of expense from the prior year was primarily due to costs
associated with the hiring of and transition to a new chief executive officer,
increased spending for information systems services and the addition of
financial staff. Also included in the amount for the three months and six
months ended June 30, 1996 are costs totalling $1,371,000 associated with the
Company's change in organizational structure and revised product strategy.
Interest Income and Expense
Interest income for the three months and six months ended June 30, 1996 was
$53,000 and $80,000, respectively. For the comparable periods in 1995,
interest income was $40,000 and $93,000, respectively. Interest income varies
depending upon the cash balances and prevailing interest rates from period to
period. Interest expense for the three months and six months ended June 30,
1996 was $21,000 and $62,000, respectively. For the comparable periods in
1995, interest expense was $94,000 and $105,000, respectively. Interest
expense is generated by the Company's line of credit borrowing and capital
lease obligations. The Company has not entered into significant additional
capital lease obligations in the current year.
Income Taxes
Due to net operating losses, the Company has incurred no income tax expense to
date. The completion of the initial public offering in November 1993
constituted a change in ownership that will limit the net operating loss
carryforwards that can be used to offset taxable income in future years. See
Notes to Condensed Financial Statements.
Liquidity and Capital Resources
To date, the Company has funded its operations primarily through (i) the
completion of its initial public offering in November 1993, (ii) private
placements of its equity and convertible debt securities with venture capital
and other investors, (iii) equipment leases, (iv) revenues from technology
development agreements and government research contracts and (v) revenues from
the sales of its CNAPS development systems, boards and software products and
PowerShop products.
12
<PAGE> 13
As of June 30, 1996, the Company had established capital leases with three
major equipment leasing companies at effective interest rates ranging from 10%
to 21%. The aggregate principal amount outstanding under these capital leases,
including the current portion, totalled $957,000 as of June 30, 1996.
Although the Company has no material commitments to purchase capital equipment,
the Company may need to expend significant additional amounts for capital
equipment in connection its change in product strategy. The Company's cash and
cash equivalents at June 30, 1996 were $4,487,000, an increase of $3,513,000
from the cash and cash equivalents balance of $974,000 at December 31, 1995.
The Company's working capital at June 30, 1996 was $4,887,000, a decrease of
$996,000 from the working capital balance of $5,883,000 at December 31, 1995.
The Company obtained additional funding of approximately $2,400,000 during the
three months ended March 31, 1996 through a private placement of common stock.
The Company expects that it will require additional funding in 1997, although
it is unable to predict the precise amount or date that such funding will be
required.
The Company will continue considering alternative sources for expected future
funding, including equity or debt financings, corporate partnering
relationships involving up-front payments and/or equity investments, sales of
technology and other alternatives. The Company has not yet identified which,
if any, of these courses it will pursue, nor has it received commitments from
any such sources for any funding of any kind. Accordingly, there can be no
assurance that any such funding can be obtained. If adequate funds are not
available as required, the Company's ability to fulfill product orders, as well
as the Company's financial position and results of operations, will be
adversely affected. In particular, the Company could be required to
significantly reduce or suspend its operations, seek a merger partner or sell
additional securities on terms that are highly dilutive to existing
stockholders. The Company's future capital needs will depend upon numerous
factors, including the progress of the Company's research and development
activities, the extent and timing of the acceptance of the Company's products,
the cost of the Company's sales, marketing and manufacturing activities and the
amount of revenues generated from operations, none of which can be predicted
with certainty, and, therefore, there can be no assurance that the Company will
not require additional funding earlier than anticipated.
The Company has 1,680,764 outstanding warrants entitling the holders to
purchase 2,286,319 shares of the Company's common stock at an exercise price of
$6.393. In addition, there are 75,000 warrants outstanding which entitle the
holders to purchase 75,000 shares of the Company's common stock at an exercise
price of $3.375.
13
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders was held on June 12, 1996. At the
meeting, the following directors were elected:
<TABLE>
<CAPTION>
No. of Shares Voted
-------------------
Directors For Withheld
--------- --- --------
<S> <C> <C>
C. Scott Gibson 3,577,564 41,995
John J. Migliore 3,577,564 41,995
Dan Hammerstrom, Ph.D. 3,577,564 41,995
T. Peter Thomas 3,577,564 41,995
Frederick M. Haney, Ph.D. 3,577,564 41,995
Jean-Claude Peterschmitt 3,577,564 41,995
</TABLE>
In addition, the shareholders approved the following proposals:
<TABLE>
<CAPTION>
Number of Shares Voted
----------------------
Proposal For Against Abstain
-------- --- ------- -------
<S> <C> <C> <C>
1) Ratify approval of an 3,457,879 37,730 123,950
amendment to the Company's
1988 Stock Incentive Plan to
increase the number of shares
of Common Stock authorized
for issuance thereunder by
500,000 shares
2) Ratify appointment of KPMG 3,180,132 221,627 96,170
Peat Marwick, LLP, as
independent auditors of the
Company for the fiscal year
ending December 31, 1996
</TABLE>
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 - Financial Data Schedule (filed electronically only)
(b) Reports on Form 8-K
On April 25, 1996, the Company filed with the Securities and
Exchange Commission a report on Form 8-K to report the Company's
financial results for the three months ended March 31, 1996.
15
<PAGE> 16
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.
ADAPTIVE SOLUTIONS, INC.
------------------------
(Registrant)
Date: August 5, 1996 By /s/ John J. Migliore
-------------- --------------------
John J. Migliore
President and Chief
Executive Officer
By /s/ Norman E. Rush
-------------------
Norman E. Rush
Corporate Controller
and acting Chief
Financial Officer
16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
EX-27 Financial Data Schedule (filed electronically only)
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ADAPTIVE
SOLUTIONS, INC.'S JUNE 30, 1996 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000873952
<NAME> ADAPTIVE SOLUTIONS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-3O-1996
<CASH> 4,487
<SECURITIES> 0
<RECEIVABLES> 1,356
<ALLOWANCES> (176)
<INVENTORY> 2,235
<CURRENT-ASSETS> 8,036
<PP&E> 3,906
<DEPRECIATION> (2,280)
<TOTAL-ASSETS> 9,762
<CURRENT-LIABILITIES> 3,149
<BONDS> 0
<COMMON> 31,068
0
0
<OTHER-SE> (24,961)
<TOTAL-LIABILITY-AND-EQUITY> 9,762
<SALES> 4,237
<TOTAL-REVENUES> 5,314
<CGS> 3,396
<TOTAL-COSTS> 3,396
<OTHER-EXPENSES> 5,388
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (62)
<INCOME-PRETAX> (3,452)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,452)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,452)
<EPS-PRIMARY> (.53)
<EPS-DILUTED> (.53)
</TABLE>
