UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998
----------------------
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 33-55254-45
ASSOCIATED TECHNOLOGIES
(Exact name of registrant as specified in its charter)
DELAWARE 87-0485306
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification Number)
3 RIVERSIDE DRIVE,
ANDOVER 01810
- --------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (978) 688-8800
---------------------
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. [ ] Yes
[ X ] No
Class Outstanding as of March 31, 1998
- -------------------- --------------------------------
CLASS A COMMON STOCK 4,630,798 shares
Par Value $0.001
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Financial Statements Page
Consolidated Balance Sheets as at December 31, 1997 and
March 31, 1998 5
Consolidated Statements of Operations for the quarter ending
March 31, 1998 and 1997 6
Consolidated Statements of Cash Flows for the quarter ending
March 31, 1998 and 1997 7
Selected Notes to Consolidated Financial Statements 8
2
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations:
Three Months Ended March 31, 1998 and 1997
As more fully described in Note 2 to the financial statements, the Company
completed 74% of a merger with VME during the quarter. The merger resulted in a
reverse acquisition for accounting purposes. At March 31, 1998 former VME
security holders controlled 50.25% of the Company's issued and outstanding
common stock. The results of operations for the three month period ended March
31, 1997 are those of VME and the comparative analysis below is based on those
results as compared to the consolidated results of operations for the three
month period ended March 31, 1998.
Net Sales for the three months ended March 31, 1998 decreased 52% to $822, 382
from $1,712,733 for the comparable period in 1997. The decrease was primarily
the result of $184,000 in royalties, $570,000 of development fees and $950,000
in sales advances being recorded in the three months ended March 31, 1997 with
no such revenue being recorded in the three months ended March 31, 1998. The
drop in revenue was offset in part by net sales of V Picks of $162,574 and net
sales from Ogenic of $654,024.
Gross profit for the three months ended March 31, 1998 increased by $503,149 to
$452,741 from ($50,408) for the three months ended March 31, 1997. The increase
was due largely to the gross profit of $480,364 attributable to the acquisition.
Selling, general and administrative decreased 51% for the first quarter to
$913,806 from $1,873,510 for the same period in 1997. The reduction was the
result of reductions in operating expenses of $622,814 and reduction of
distribution rights related expenses of $900,000. These savings were in part
offset by $513,653 in operating expenses from both Ogenic and the legal parent
company.
The company also incurred a non-recurring charge of $2,900,326 relating to 74%
of the estimated value of purchased research and development resulting from the
merger of the Company and VME.
As a result of the above factors operating losses increased to ($3,399,622) in
the three month period ended March 31, 1998 from ($1,951,776) for the three
months ended March 31, 1997.
Liquidity and Capital Resources:
The company has funding obligations under the Securities Exchange Agreement with
VME dated December 18, 1997 of $1,500,000, due in scheduled payments through May
15, 1998. First Sydney, a related party, is obligated to provide the funding in
the event the Company is unable to do so. The capital contributed by First
Sydney is convertible into shares of the Company's common stock at a rate of
$2.50 of funding per share of common stock. When First Sydney was unable to
provide the funding specified in the Securities Exchange Agreement, the Company
exhausted every opportunity to raise alternative funding. Regrettably, this
funding did not materialise and on November 18, 1998, the Company agreed to the
unwinding of the Securities Exchange Agreement and rescission of the Merger
Agreement in return for a 20% shareholding in VME to compensate the Company for
funding already provided.
3
<PAGE>
Cash used in operating activities decreased to $888,186 for the three months
ended March 31, 1998 from $2,099,272 for the three months ended March 31, 1997.
Cash provided by investing activities for the period ended March 31, 1998 was
$584,347, inclusive of $643,847 of cash acquired in the Merger, as compared to
$2,853,157 for the three months ended March 31, 1997. Cash provided by financing
activities decreased to $440,435 for the three months ended March 31, 1998 from
$(3,134) for the three months ended March 31, 1997.
As of March 31, 1998 the company has an accumulated deficit of $20,665,960 and
deficit working capital of $6,235,292.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included in this filing:
Page
Financial Statements as of March 31, 1998 5-11
Financial Data Schedule
(b) Reports on Form 8-K.
Announcement of Acquisition of a majority interest in Virtual Music
Entertainment Inc - 16th January 1998.
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 hereunto duly authorized.
ASSOCIATED TECHNOLOGIES
By: s/ John Deloughery
John Deloughery
CEO and Director
Dated : February 22, 1999
4
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
consolidated balance sheets
Assets
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
(unaudited) (unaudited)
------------------- -----------------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 132,286 $ 4,738
Accounts receivable, net of allowances of $5,676 as of March
31, 1998 and December 31, 1997 190,730 27,114
Inventory 300,091 116,619
Prepaid and other current assets 180,784 43,178
------------------- -----------------
Total current assets 803,891 191,649
Furniture, equipment and leasehold improvements, net 392,192 307,205
Capitalized software costs 520,000 465,000
Other Assets 1,338,665 265,352
------------------- -----------------
Total assets $ 3,054,738 $ 1,229,206
=================== =================
Liabilities and Stockholders' Deficit
Current Liabilities:
Notes payable $ 1,671,203 $ 1,577,000
Accounts payable and accrued expenses 2,991,990 2,245,027
Deferred revenue 438,111
Distributor advances 1,722,700 1,667,200
Customer deposits 215,179 -
------------------- -----------------
Total current liabilities 7,039,183 5,489,227
Capital lease obligations, net of current portion 5,838 699
------------------- -----------------
Total liabilities 7,045,021 5,489,926
------------------- -----------------
Stockholders' Deficit:
Convertible preferred stock, Series D, $0.01 par value;
3,450,000 shares authorized; 0 and 3,434,050 shares
issued and outstanding at March 31, 1998 and December 31,
1997 respectively (liquidation preference, $2,609,878 at
December 31, 1997) 0 34,341
Convertible preferred stock, Series E, $0.01 par value;
6,000,000 shares authorized; 0 and 1,528,583,
and shares issued and outstanding at March 31, 1998
and December 31, 1997 respectively (liquidation preference,
$3,011,309 at December 31, 1997) 0 15,286
Common stock, $.001 par value; 25,000,000 shares
authorized; 4,630,798 and 2,534,481 shares issued and
outstanding at March 31, 1998 and December 31, 1997
respectively 4,631 2,535
Cumulative Translation Adjustment (9,048) -
Adjustment Additional paid-in capital 16,680,094 12,955,018
Accumulated deficit (20,665,960) (17,267,900)
------------------- -----------------
Total stockholders' deficit (3,990,283) (4,260,720)
------------------- -----------------
Total liabilities and stockholders' deficit $ 3,054,738 $ 1,229,206
=================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended
March 31 ,
(unaudited)
1998 1997
------------- -----------
<S> <C> <C>
NET SALES $ 822,382 $ 1,712,733
COST OF SALES 369,641 1,763,141
------------- -----------
GROSS PROFIT 452,741 (50,408)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 913,806 1,873,510
NON-RECURRING CHARGE ,WRITE OFF OF PURCHASED R&D 2,900,326 -
------------- -----------
LOSS FROM OPERATIONS (3,361,391) 1,923,918
INTEREST INCOME (EXPENSE), NET (38,231) (7,237)
------------- -----------
LOSS FROM OPERATIONS BEFORE INCOME TAXES (3,399,622) (1,931,155)
PROVISION FOR INCOME TAXES - 20,621
-
NET LOSS $ (3,399,622) $(1,951,776)
============= ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (78) (1.02)
BASIC AND DILUTED SHARES OUTSTANDING 4,376,102 1,906,296
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
March 31 ,
(unaudited)
1998 1997
------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from operations before extraordinary item $ (3,399,622) $(1,951,776)
Adjustment to reconcile net loss to net cash used in operating
activities
Depreciation and amortization 82,652 25,541
Bad debt expense and allowances (34,605) (5,873)
Non cash charge for purchased R&D 2,900,326
Changes in operating assets and liabilities
net of effect of the reverse acquisition of
Associated Technologies, Inc.:
Accounts receivable 166,825 52,384
Inventory (2,605) (230,379)
Other current assets and prepaid expenses (97,880) 224,376
Deferred Revenue (429,764)
Other Assets (23,779) 130,151
Accounts payable and accrued expenses (320,313) 1,214,562
Royalties payable (181,432)
Distributor advances 55,500 (1,376,826)
Customer Deposits 215,179 -
------------- -----------
Net cash used in operating activities (888,186) (2,099,272)
Cash Flows from Investing Activities:
Purchase of furniture, equipment and leasehold improvements (4,500) (81,224)
Payments for purchase of intangible assets (24,587)
Decrease (Increase) in capitalized software (55,000) 1,408,108
Net proceeds from issuance of preferred stock 1,550,860
Cash acquired from acquisition of Associated. 643,847 -
------------- -----------
Net cash provided in investing activities 584,347 2,853,157
------------- -----------
Cash Flows from Financing Activities:
Proceeds from notes payable 438,602
Principal payments under capital lease obligations 5,140 (3,134)
Cash paid for subsidiary (3,307) -
------------- -----------
Net cash provided by financing activities 440,435 (3,134)
------------- -----------
Effect of Exchange rates on cash and equivalents (9,048) -
------------- -----------
Net Increase (Decrease) in Cash 127,548 750,751
Cash at Beginning of Period 4,738 202,907
------------- -----------
Cash at End of Period $ 132,286 $ 953,658
============= ===========
Supplemental Disclosure of Cash Flow Information:
Income taxes paid - 20,621
Supplemental Disclosure of Non-cash Financing
Activities:
Conversion of promissory notes, including accrued interest to
convertible preferred stock, Series E $1,156,815
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
Notes to Condensed Financial Statements
(unaudited)
Note 1. Basis of Presentation
The Company, a Delaware corporation, was incorporated on August 9, 1990 under
the laws of the State of Nevada and subsequently reincorporated in the State of
Delaware on October 16, 1997. The Company was a development stage company and
conducted no business operations until June of 1996 when it acquired Ogenic
Technologies Pty Ltd. ("Ogenic"), an Australian-based manufacturer and supplier
of equipment and services for the radio broadcasting industry.
On February 5, 1998 the Company completed 74% of a merger, more fully described
in Note 2, with Virtual Music Entertainment, Inc., a Delaware corporation
("VME") which develops and markets multimedia interactive musical entertainment
software for personal computer and home entertainment systems. At March 31, 1998
former VME security holders controlled 50.25% of the Company's issued and
outstanding common stock. In accordance with APB 16 the merger is being treated
as a reverse acquisition for accounting purposes. The historical results of
operations for the three month period ended March 31, 1997 and the balance sheet
as of December 31, 1997 are those of VME.
On November 18, 1998 and in view of the Company's inability to meet its
obligations under the Securities Exchange Agreement, agreement was reached
between the Company and VME for the unwinding of the incomplete merger. In
addition, the Company agreed to retain a 20% shareholding in VME in return for
$1,384,000 invested by Associated in VME in the form of loan notes. As a result,
Note 9 below includes a proforma statement of accounts at March 31, 1998 for the
Company, drawn up as if VME had not been acquired and no part of the partial
merger had been completed.
Since its acquisition of Ogenic and VME, the Company has operated as a holding
company which derives income solely from the operations of Ogenic and VME. The
term "Company" as used herein shall collectively mean Associated, Ogenic and
VME.
The accompanying unaudited condensed financial statements of the Company have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"), and, in the opinion of management, reflect all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
the periods presented. Certain information and footnote disclosures included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Certain reclassifications have been
made to prior period financial statements to conform with current presentation.
These condensed financial statements should be read in conjunction with the
audited financial statements and notes thereto included in the financial
statements filed as part of the Company's Annual Report on Form 10-K filed for
the year ended December 31, 1997.
Assets and liabilities of foreign subsidiaries, where the functional currency is
the local currency, are translated at current exchanges rates and the related
translation adjustments are reported as a component of stockholders' equity.
Income statement accounts are translated at the average rates during the period.
Foreign currency transaction gains and losses, as well as translation
adjustments for assets and liabilities of foreign subsidiaries where the
functional currency is the dollar, are included in net income.
Included in the net loss for the period ended March 31, 1998 is a non-recurring
charge of $2,900,326 representing the portion of the purchase price allocated to
purchased research and development arising from the reverse merger with VME (as
described in Note 2).
The results of the operations for the three months ended March 31, 1998 are not
necessarily indicative of the operating results for the full year.
8
<PAGE>
Note 2. Partial acquisition of Virtual Music Entertainment, Inc.
On December 19, 1997, the Company entered into a Securities Exchange Agreement
to purchase a majority of the outstanding equity, on a fully-diluted basis, and
assume certain note payables of VME in exchange for up to 3,144,962 shares of
Common Stock. Upon completion of the share exchange in accordance with the
Securities Exchange Agreement , former note holders and preferred and common
stock holders of VME will hold fifty five percent (55%) of the issued and
outstanding shares of the Company's common stock. As a result, the merger is
being accounted for, and the historical condensed financial statements are
presented as, a reverse merger with VME as the acquirer for accounting purposes.
As of February 5, 1998 VME Security Holders controlled 50.25% of the Company's
issued and outstanding common stock.
On January 8, 1998, the Company consummated a portion of the Exchange whereby it
acquired a majority of the outstanding voting securities of VME from certain
selling stockholders of VME (the "VME Securityholders") who tendered certain VME
securities (the "VME Tendered Securities") in exchange for 2,090,432 shares of
Common Stock. On February 5, 1998, the Company acquired additional VME Tendered
Securities in exchange for 236,849 shares of Common Stock. Pursuant to the terms
of the Securities Exchange Agreement, a notes payable in an amount of $1,089,000
issued by Associated in favor of First Sydney Investments Pty Ltd ("First
Sydney") are to be converted into 435,600 shares of Common Stock.
As part of the Exchange, the Company, VME and AT Sub, Inc., a Delaware
corporation and wholly-owned special purpose subsidiary of Associated ("AT Sub")
also entered into an Agreement and Plan of Merger dated as of January 8, 1998
(the "Merger Agreement"). Pursuant to the Merger Agreement, the stockholders of
VME were to be solicited to vote for a merger (the "Merger") of AT Sub with and
into VME (with VME being the surviving corporation). In connection with the
Merger, Associated was to issue an additional 1,054,530 shares of Common Stock
and pay certain cash consideration and VME would have become a wholly-owned
subsidiary of Associated. The consummation of the Merger was subject to the
satisfaction of certain conditions set forth in the Merger Agreement, including
the approval of the Merger by the stockholders of VME.
The conditions contained in the Securities Exchange Agreement provided inter
alia for First Sydney to provide funding of $2,050,000 to VME in accordance with
a defined time schedule. By September 30, 1998, First Sydney had provided
funding of $1,960,500, $89,500 short of the original agreed sum over the period
to September 1998. VME has expended $398,011 of these funds in settlement of
costs associated with the Merger. Furthermore, monies advanced were not received
by VME on the due dates.
As a result of First Sydney's inability to provide further funding and the
Company's inability to locate alternative sources of funding, an agreement was
reached between the Company and VME to unwind the Securities Exchange Agreement
and to rescind the Merger Agreement. At the same time, funding of $1,384,000
provided by First Sydney, is to be converted into equity in VME such that
Associated will retain a 20% holding in VME.
In anticipation of completion of the Merger, the Company advanced through March
31, 1998, $1,346,500 to VME. The amounts owing between the Company and VME have
been eliminated in consolidation. In addition the Company holds $960,000 in
notes payable issued by VME which the Company received from note holders in
exchange for 420,982 shares of the Company's common stock.
At March 31, 1998, the Company had issued 2,327,278 of the 3,144,962 or seventy
four percent (74%) of the total shares to be issued upon completion of the
Merger. The allocation of the purchase price reflected in the accompanying
financial statements reflect the allocation of 74% of the estimated purchase
price at a value of $1.54 per share. The net assets acquired were less than the
liabilities assumed and accordingly the minority interest remaining has been
included in goodwill.
Note 3. Loss Per Share
The Company adopted SFAS No. 128, Earnings Per Share, which requires disclosure
about computing and presenting earnings per share. Basic and Diluted Loss Per
Share has been computed for the three month period ended March 31, 1998 by
dividing
9
<PAGE>
the consolidated net loss for the period by the weighted average shares
outstanding for the period. Diluted net loss per share is the same as basic net
loss per share since the shares issuable pursuant to completion of the Merger
with VME, conversion of notes payable, and stock options are not considered as
their effect is antidilutive. The company has 817,684 shares issuable upon
completion of the Merger with VME, 435,600 shares for conversion of notes
payable, and 2,535,500 shares for stock options.
Basic and Diluted Loss Per Share for the three month period ended March 31, 1997
has been calculated by dividing the net loss for VME (the acquirer for
accounting purposes) by the shares which would have been issued had the Merger
been 74% complete of March 31, 1997, less 420,982 shares issued to VME Note
Holders, as such notes payable were outstanding at March 31, 1997.
Note 4. Comprehensive Income
The Company adopted SFAS No. 130, Reporting Comprehensive Income, which requires
reporting comprehensive income separately between Net Income and Other
Comprehensive Income. Other Comprehensive Income includes: foreign currency
items, pension liability adjustments and unrealized gains and losses on
securities and investments. The Company's component of other comprehensive
income is reported below:
Three Months Ended
March 31,
1998 1997
--------- --------
Cumulative Currency Translation
Beginning Balance - -
Current Period Charge (9,048) -
--------- --------
Ending Balance (9,048) -
Note 5. New Accounting Standards
In June 1997, FASB issued SFAS No. 131, Disclosure of an Enterprise and Related
Information, which is effective for fiscal years beginning after December 15,
1997. The company is not required to adopt SFAS No. 131 for interim financial
statements during the initial year of application. Unless impracticable, the
Company will be required to restate prior period information upon adoption.
Note 6. Pro-Forma Financial Results
The following is a comparison, on a pro-forma basis, of consolidated net
revenue, operating income net of acquisition related non-recurring charges, and
earning per share, as if the acquisition had been completed on January 1, 1997.
Pro-forma for three months ended
March 31,
1998 1997
----------- ------------
Net Revenues $ 822,382 $ 1,869,284
Income (Loss) from Operations $ (499,296) $ (2,452,175)
Income (Loss) per Basic Share Outstanding $ (.09) $ (.46)
Weight average shares outstanding 5,448,482 5,292,962
10
<PAGE>
Note 8. Acquisition of CGI
On January 31, 1998, the Company acquired 100% of the outstanding equity of CGI
Syndicated Investments Pty Ltd., ("CGI") a dormant shell corporation for $3,307
in cash. CGI has since entered into a joint venture agreement with Elderberry
Holdings Pty Ltd, ("Elderberry") pursuant to a proposed research and development
("R&D") syndication agreement with Ogenic. CGI will provide 10% of the funding
for this R&D syndication with the balance being provided by Elderberry.
Note 9. Proforma Financial Statements
The proforma financial statements which follow have been prepared as if VME had
never been acquired. These financial statements are provided to enable the
reader of the accounts to assess the impact of the reversal of the VME Merger on
the accounts of the Company when it is finalised during 1999.
11
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
Proforma Consolidated balance sheets
Assets
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
(unaudited) (audited)
--------------------- -----------------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 31,891 $ 643,847
Accounts receivable 175,375 330,342
Inventory 234,329 180,867
Prepaid and other current assets 114,096 39,726
Note receivable - VME (incl. interest) - see note below 1,412,508 0
--------------------- -----------------
Total current assets 1,968,199 1,194,782
Note receivable plus accrued interest 624,347
Furniture, equipment and leasehold improvements, net 109,519 112,119
--------------------- -----------------
Total assets $ 2,077,718 $ 1,931,248
===================== =================
Liabilities and Stockholders' Deficit
Current Liabilities:
Notes payable $ 1,664,203 $ 1,225,601
Accounts payable and accrued expenses 1,159,537 991,061
Deferred revenue 438,111 867,875
Customer deposits 215,179 217,621
--------------------- -----------------
Total current liabilities 3,477,030 3,302,158
Stockholders' Deficit:
Common stock, $.001 par value; 25,000,000 shares
authorized; 2,303,520 shares issued 2,304 2,304
Additional paid in capital 3,512,995 3,512,995
(Deficit) accumulated (4,941,682) (4,922,328)
Cumulative Translation Adjustment 27,071 36,119
--------------------- -----------------
Total stockholders' deficit (1,399,312) (1,370,910)
--------------------- -----------------
Total liabilities and stockholders' deficit $ 2,077,718 $ 1,931,248
===================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements
The Proforma Balance Sheet (above) and the Statement of Operations (next), show
the position of the Company as if the acquisition of VME had not occurred.
Note Receivable - VME
It is anticipated that this receivable will be converted into a 20% shareholding
in VME during 1999. The realizable value of this investment is uncertain
primarily because of the difficulty in assessing the value of the company's
software development intangible. At 30th June 1998, VME reported unaudited
results showing a Total Stockholders Deficit of $4,574,087. If the deficit is
adjusted for Notes due to ATTT, the deficit would fall to approximately $1.6m.
In the event, therefore, that no realizable value could be ascribed to the
developed software, there would be no value attaching to ATTT's investment.
12
<PAGE>
ASSOCIATED TECHNOLOGIES, INC.
Proforma Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended
March 31 ,
(unaudited)
1998 1997
------------- -----------
<S> <C> <C>
NET SALES $ 654,024 $ 156,552
COST OF SALES (173,660) (76,268)
------------- -----------
GROSS PROFIT 480,364 80,284
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (513,653) (455,444)
------------- -----------
LOSS FROM OPERATIONS (33,289) (375,160)
INTEREST INCOME (EXPENSE), NET 17,242 (23,281)
------------- -----------
LOSS FROM OPERATIONS BEFORE INCOME TAXES (16,047) (398,441)
PROVISION FOR INCOME TAXES 0 0
------------- -----------
NET LOSS $ (16,047) $ (398,441)
============= ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (0.01) $ (0.19)
BASIC AND DILUTED SHARES OUTSTANDING 2,303,520 2,148,000
The accompanying notes are an integral part of these financial statements.
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Associated Technologies and Subsidiaries March 31,1998 financial
statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000894565
<NAME> Associated Technologies
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 132,286
<SECURITIES> 0
<RECEIVABLES> 196,406
<ALLOWANCES> (5,676)
<INVENTORY> 300,091
<CURRENT-ASSETS> 803,891
<PP&E> 718,797
<DEPRECIATION> (326,605)
<TOTAL-ASSETS> 3,054,738
<CURRENT-LIABILITIES> 7,039,183
<BONDS> 0
0
0
<COMMON> 4,631
<OTHER-SE> (3,994,914)
<TOTAL-LIABILITY-AND-EQUITY> 3,054,738
<SALES> 822,382
<TOTAL-REVENUES> 822,382
<CGS> 369,641
<TOTAL-COSTS> 369,641
<OTHER-EXPENSES> 3,814,132
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,231
<INCOME-PRETAX> (3,399,622)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,361,391)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,399,622)
<EPS-PRIMARY> (.78)
<EPS-DILUTED> (.78)
</TABLE>
