U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended September 30, 1997
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 0-27560
ACT Teleconferencing, Inc.
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(Name of small business issuer as specified in its charter)
Colorado 84-1132665
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(State or other jurisdiction of incorporation (IRS Employer Identification
or organization) No.)
1658 Cole Blvd., Suite 130, Golden, Colorado 80401
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(Address of principal executive offices) (Zip Code)
(303) 233-3500 (303) 238-0096
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(Issuer's telephone number, including (Issuer's facsimile number,
area code) including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of November 14, 1997, 3,121,840 shares of the issuer's common stock were
outstanding.
<PAGE>
ACT TELECONFERENCING, INC.
FORM 10-QSB
Table of Contents
PART I. Financial Information Page No.
Item 1. Financial Statements 3
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management Discussion and Analysis
of Financial Condition and Results of
Operations 8
PART II. Other Information
Item 6. Exhibit Index 12
Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACT TELECONFERENCING, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 796,971 $ 621,742
Accounts receivable (net of allowances) 2,449,142 1,356,471
Prepaid expenses 242,856 55,994
Inventory 133,365 125,850
Available for sale marketable securities 50,000 50,000
----------- -----------
Total current assets 3,672,334 2,210,057
Equipment:
Telecommunications equipment 2,141,670 1,664,697
Office equipment 1,154,142 702,019
Less: accumulated depreciation (966,095) (736,556)
----------- -----------
Total equipment - net 2,329,717 1,630,160
Goodwill 231,522 245,052
----------- -----------
Total assets $ 6,233,573 $ 4,085,269
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 160,978 $ 74,784
Accounts payable 937,612 764,520
Accrued liabilities 499,005 339,299
Current portion of long term debt 184,711 177,312
Income taxes payable 252,819 156,991
----------- -----------
Total current liabilities 2,035,125 1,512,906
Long-term debt 526,250 395,960
Deferred income taxes 39,385 41,042
Minority interest 510,973 367,404
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares
authorized; none issued -- --
Common stock, no par value; 10,000,000 shares
authorized; 3,513,080 and 2,939,930 shares issued
and outstanding in 1997 and 1996, respectively 5,651,385 4,022,671
Accumulated deficit (2,417,815) (2,292,261)
Currency translation adjustment (111,730) 37,547
----------- -----------
Total shareholders' equity 3,121,840 1,767,957
----------- -----------
Total liabilities and shareholders' equity $ 6,233,573 $ 4,085,269
=========== ===========
</TABLE>
<PAGE>
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1997 1996
---------------------------
*(Unaudited)
<S> <C> <C>
Net revenues $ 2,612,841 $ 1,579,194
Costs and expenses:
Cost of teleconferencing services (1,407,336) (1,031,882)
Marketing, general and administration costs (1,208,878) (921,803)
----------- -----------
Total costs and expenses (2,616,214) (1,953,685)
Income (loss) before taxes and minority interest (3,373) (374,491)
Provision for income taxes (105,560) (5,788)
----------- -----------
Income (loss) before minority interest (108,933) (380,279)
Minority interest in earnings of consolidated subsidiary (55,076) (15,731)
----------- -----------
Net income (loss) for the period $ (164,009) $ (396,010)
=========== ===========
Net income (loss) per share $ (0.05) $ (0.13)
=========== ===========
Weighted average number of shares outstanding 3,393,001 3,038,830
=========== ===========
NINE MONTHS ENDED SEPT 30,
1997 1996
---------------------------
(Unaudited)
Net revenues $ 7,235,069 $ 4,516,740
Costs and expenses:
Cost of teleconferencing services (3,244,360) (2,779,585)
Marketing, general and administration costs (3,744,355) (2,361,982)
----------- -----------
Total costs and expenses (6,988,715) (5,141,567)
Income (loss) before taxes and minority interest 246,354 (624,827)
Provision for income taxes (219,435) (64,838)
----------- -----------
Income (loss) before minority interest 26,919 (689,665)
Minority interest in earnings of consolidated subsidiaries (152,473) (63,703)
----------- -----------
Net income (loss) for the period $ (125,554) $ (753,368)
=========== ===========
Net income (loss) per share $ (0.04) $ (0.26)
=========== ===========
Weighted average number of shares outstanding 3,099,087 2,865,490
=========== ===========
</TABLE>
<PAGE>
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
-----------------------------
Currency
Accumulated Translation
Shares Amount Deficit Adjustment Total
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<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 2,318,000 $ 2,157,940 $(1,084,154) -- $ 1,073,786
Shares issued for cash 712,497 1,987,531 -- -- 1,987,531
Expiration of put issued in
connection with prior year
acquisition -- 125,000 -- -- 125,000
Reduction of purchase price
related to videoconferencing
acquisition (100,000) (250,000) -- -- (250,000)
Cash-less exercise of employee
stock options 8,333 -- -- -- --
Exercise of employee stock
options 1,100 2,200 -- -- 2,200
Currency translation adjustment -- -- -- 37,547 37,547
Net Loss for the year -- -- (1,208,107) -- (1,208,107)
----------- ----------- ----------- --------- -----------
Balance December 31, 1996 2,939,930 $ 4,022,671 $(2,292,261) $ 37,547 $ 1,767,957
Exercise of employee stock
options 38,500 42,000 42,000
Shares issued in connection with 534,650 1,586,714 1,586,714
exercise of 1994 and 1995 privately
placed warrants
(net of expenses)
Net income (125,554) (125,554)
Currency translation adjustment (149,277) (149,277)
----------- ----------- ----------- --------- -----------
Balance at September 30, 1997
(Unaudited) $ 3,513,080 $ 5,651,385 ($2,417,815) ($111,730) $ 3,121,840
=========== =========== =========== ========= ===========
</TABLE>
<PAGE>
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT 30,
1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (125,554) $ (753,368)
Adjustments to reconcile net income to
net cash used for operating activities:
Depreciation 229,539 208,166
Amortization of goodwill 13,530 30,024
Deferred income tax (1,656) --
Minority interest 143,569 86,704
----------- -----------
Cash flow before changes in operating assets and liabilities: 259,428 (428,474)
Accounts receivable (1,066,671) (699,093)
Inventory (7,515)
Prepaid expenses and other assets (186,862) (80,674)
Accounts payable and accrued liabilities 332,800 567,291
Income taxes payable 95,828 (44,579)
----------- -----------
Net cash used for operating activities (572,992) (685,529)
INVESTING ACTIVITIES
Property and equipment purchases (929,097) (719,892)
----------- -----------
Net cash flow before financing activity (1,502,089) (1,405,421)
FINANCING ACTIVITIES
Net proceeds from issuance (repayment) of debt 197,883 208,904
Net proceeds from issuance of common stock 1,628,712 1,987,533
----------- -----------
Net cash after financing activities 324,506 791,016
Effect of change in exchange rate on cash (149,277) (7,362)
----------- -----------
Net increase in cash and cash equivalents $ 175,229 $ 783,654
=========== ===========
Cash and cash equivalents, beginning of year $ 621,742 $ 288,345
Cash and cash equivalents, end of year 796,971 1,071,999
----------- -----------
Net increase in cash $ 175,229 $ 783,654
=========== ===========
</TABLE>
<PAGE>
ACT TELECONFERENCING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary of a fair presentation have
been included. Operating results for the nine-month period ending September 30,
1997 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1996.
BUSINESS
ACT Teleconferencing, Inc. (the Company) is engaged in the business of providing
high-quality audio, data, and video conferencing products and services to
business clients. The Company operates in the United States, the United Kingdom,
the Netherlands, Belgium and Australia.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of ACT
Teleconferencing, Inc., its wholly owned domestic subsidiaries ACT
Teleconferencing Services, Inc., ACT VideoConferencing, Inc., ACT Research,
Inc., its 60% owned United Kingdom subsidiary, ACT Teleconferencing Limited, its
80% owned Australian subsidiary, ACT Teleconferencing (Proprietary) Limited, and
its 100% owned Netherlands subsidiary, ACT Teleconferencing, B.V. All material
intercompany transactions and balances have been eliminated.
EQUIPMENT AND DEPRECIATION
Equipment is stated at cost. Depreciation is calculated on a straight-line basis
over the estimated useful lives of five years for furniture and five or ten
years for equipment. Depreciation expense includes capital lease amortization
charges.
NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share are computed based upon the weighted average
number of shares of common stock outstanding during the period. Options and
warrants are not included in the computations since their effect is presently
either anti-dilutive or not material. 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 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 expected impact of
Statement No. 128 on these quarters is not expected to be material.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION OF THIS REPORT
CONTAINS FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO CERTAIN RISKS
AND UNCERTAINTIES. CERTAIN SUCH STATEMENTS ARE REPEATED AT THE END OF
THIS MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION TOGETHER WITH
SPECIFIC CAUTIONARY STATEMENTS IDENTIFYING FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT EXPECTATIONS CONTAINED
IN EACH SUCH STATEMENT. FORWARD-LOOKING STATEMENTS ALSO MAY BE IMPLICIT
BUT NOT READILY IDENTIFIED WITHIN THE CONTEXT OF OTHER STATEMENTS. IN
GENERAL, AMONG THE FACTORS THAT COULD AFFECT THE COMPANY'S ACTUAL
RESULTS AND COULD CAUSE RESULTS TO DIFFER FROM THOSE CONTAINED IN THE
FORWARD-LOOKING STATEMENTS ARE THE CONTINUED ABILITY OF THE COMPANY TO
GENERATE REVENUE GROWTH IN AUDIO TELECONFERENCING, THE GENERAL RATE OF
DEVELOPMENT OF THE MARKET FOR VIDEOCONFERENCING SERVICES, AND THE
AVAILABLE OPPORTUNITIES TO EXPLORE NEW FOREIGN MARKETS. OTHER FACTORS
COULD ALSO CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE ANTICIPATED
RESULTS COVERED IN SUCH FORWARD-LOOKING STATEMENTS.
OVERVIEW
The Company completed the third quarter with continued growth. Third quarter
revenues grew by 65% over the third quarter 1996, reflecting continued growth in
the market for audio teleconferencing services as well as additional market
share gains made by the Company. Revenue growth for the first nine months of the
year amounted to 60% compared to same period in the previous year.
Net income after taxes and minority interest amounted to a loss of $164,009; an
improvement of $232,001 over the corresponding previous quarter last year, due
mainly to continued growth in the Company's North American and European
operations. Net income after taxes and minority interest for the nine-month
period amounted to a loss of $125,553 reflecting an improvement of $627,815 over
the same period in 1996.
The Company anticipates continued growth in audio teleconferencing revenues in
its operations in North America and Europe. On May 15, 1997, the Company
announced the opening of its Australian teleconferencing operation as a first
step towards developing its market for teleconferencing on the Pacific Rim and
accelerating the company's global expansion plan.
In March 1997, an agreement was reached in the United States with AT&T to
co-market the Company's range of videoconferencing systems. Implementation of
this agreement remains in the early stages, and it is not possible to determine
the extent to which it may impact the Company's revenues. The market for
videoconferencing continues to grow in terms of both the quality of transmission
and diversity of application. The Company is presently engaged in both the
equipment and videobridging market sectors.
In July 1997 the company announced an acceleration of its global expansion
program in line with better than expected revenue growth achieved in North
America. In September 1997 the company announced a further major expansion and
relocation of its North American hub to a 12,000 square foot location in Denver,
Colorado - which is anticipated to provide for operations growth until the year
2000.
In November 1997 the company announced an agreement to acquire 80 percent of the
issued common shares of MultiMedia and TeleConferencing Solutions, Limited
(M.a.T.S.), a United Kingdom company and leading provider of video conferencing
solutions for Europe, Africa and the Middle East. The transaction is expected to
close before the end of 1997, subject to the fulfillment of certain conditions
including authority to be received from the U.K. Inland Revenue.
COMPONENTS OF REVENUE AND EXPENSE
The Company derives revenues principally from fees charged to clients for audio,
video and data teleconferencing "bridging" services which interconnect multiple
parties to a conference call, from fees for enhanced services which supplement
conference calls, and from re-billing long-distance charges at a margin in
excess of the rate paid by the Company for its volume purchases of long-distance
service.
<PAGE>
The costs of teleconferencing services consist of local and long-distance
telephone services, depreciation on equipment, salaries, benefits, and office
expenses of conference reservationists and coordinators, who plan, organize, and
manage teleconferences.
Marketing, general and administrative costs consist of salaries, benefits, and
office expenses of the Company's administrative, market development, and sales
organizations.
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1997, COMPARED TO QUARTER ENDED SEPTEMBER 30, 1996
NET REVENUES. Net revenues increased by 65% to $2.6 million for the quarter
ended September 30, 1997, compared to $1.6 million for the same period in 1996,
primarily due to increased sales of audio teleconferencing services. Revenue
growth resulted from repeat sales to established customers and increased sales
of enhanced services as well as from sales to new customers. During the period,
domestic (North American) operations accounted for 51% of net revenues, compared
to 50% for the prior period.
COST OF TELECONFERENCING SERVICES. Cost of teleconferencing services increased
to $1,407,336 for the third quarter, compared to $1,031,882 for the previous
comparative quarter. Gross margin (net revenues less costs of conferencing
services divided by net revenues) for the third quarter ended September 30, 1997
increased to 46.1% percent, compared to 34.7% achieved during the prior period.
The increase in gross margin was achieved by the increased sales of value-added
products as well as from increased productivity.
MARKETING, GENERAL AND ADMINISTRATIVE COSTS. Marketing, General, and
Administrative expenses for the third quarter were $1,208,878, or 46% of
revenue, compared to $921,803 or 58% of revenue for third quarter 1996. The 31%
increase in such expenses reflects the increase in audio teleconferencing sales
efforts, as well as development costs for the Company's new business units in
Europe and Australia, the entry into videoconferencing, and new international
market development costs.
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST. Loss before taxes and minority
interest amounted to $3,373, compared to a loss before taxes and minority
interest of $374,491 for the previous corresponding quarter. This improvement
was caused by the combination of increased revenues, better margins and improved
productivity as described above.
TAXES ON INCOME AND MINORITY INTEREST. Taxes on income and minority interest
amounted to $160,636 for the quarter ended September 30, 1997, compared to
$21,519 for 1996, primarily due to taxes paid on and minority interest in
earnings achieved by the Company's 60% majority-owned United Kingdom subsidiary
which pays full tax. The Company paid no United States income tax due to net
operating losses incurred in its United States operations in previous years.
NET INCOME (LOSS). Net income amounted to a loss of $164,009 or an improvement
of $232,001 for the quarter. The reasons for the improvement are revenue growth,
better margins and improved productivity as described above.
NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997, COMPARED TO NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1996
NET REVENUES. Net revenues increased by 60% to $7.2 million for the nine months
ended September 30, 1997, compared to $4.5 million for the same period in 1996,
primarily due to increased sales of audio teleconferencing services. During this
period, domestic operations accounted for 49% of net revenues, compared to 51%
for the prior period. International revenues accounted for 51% of revenues
compared to 49% for the prior period.
COST OF TELECONFERENCING SERVICES. Cost of teleconferencing services amounted to
$3,244,359 compared to $2,779,585 or an increase of 17% for the nine-month
period. Gross margin (net revenues less costs of conferencing services divided
by net revenues) increased to 55.2%, compared to 38.5% achieved during the
previous comparable period.
<PAGE>
MARKETING, GENERAL AND ADMINISTRATIVE COSTS. Marketing, General and
Administrative expenses were $3,744,355 or 52% of revenue, compared to
$2,361,982 or 52% of revenue for 1996. The reasons for growth of 58% in such
expenses are due to increased selling and market development efforts.
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST. Income before taxes and
minority interest amounted to $246,355, compared to a loss before taxes and
minority interest of $624,827 in 1996. The improvement of $871,182 was caused by
the combination of increased revenues, better margins and improved productivity
in core operations.
TAXES ON INCOME AND MINORITY INTEREST. Taxes on income and Minority interest
amounted to $371,908 for the nine months ended September 30, 1997, compared to
$128,541 for 1996, primarily due to taxes paid on and minority interest in
earnings achieved by the Company's 60% majority-owned United Kingdom subsidiary
which pays full tax.
NET INCOME (LOSS). Net income amounted to a loss of $125,553 or an improvement
of $627,815 for the nine-month period.
LIQUIDITY AND CAPITAL RESOURCES (NINE MONTHS ENDED SEPTEMBER 30, 1997)
During the nine months ended September 30, 1997, net cash increased by $175,229.
At September 30, 1997, the Company had cash and cash equivalents of $796,971
compared to cash and cash equivalents on hand in 1996 of $621,742.
The Company generated net proceeds of $1,628,712 after the conversion of certain
common stock warrants, arising from a private placement of 1994, which were
exercised during the year. Capital thus raised was used primarily to finance the
purchase of equipment and the additional working capital required because of
sales growth.
Cash from operating activities before funding operating assets such as accounts
receivable amounted to $259,428 compared to a cash outflow recorded for 1996 of
$428,474 or an improvement in cash from operating activities as defined above of
$687,902. Cash after financing operating assets and liabilities amounted to a
net outflow of $572,992 reflecting mainly the significant growth in accounts
receivable of $1,066,671.
During the nine-month period, the Company invested $929,097 in additional
equipment, to provide ongoing new bridging technology and capacity to the United
States and European operations. The gross cash outflow (after capital investment
and before financing arrangements of $1,502,089) was funded by a combination of
debt and equity finance amounting to $1,826,595 and resulted in a net cash
inflow (before the effect of exchange rate changes) amounting to $324,506.
The Company believes that, given the present rate of sales and profit growth in
its core audio teleconferencing business, it will have sufficient cash resources
to meet its working capital needs for the next twelve months. The Company has
further plans to expand capacity and open new operations in new geographic
locations, and to develop its videoconferencing business. These expansion plans
will be financed using a mix of lease financing for capital equipment and equity
financing as considered appropriate.
During the period the company completed a post-effective amendment registration
statement concerning 712,497 publicly traded warrants, which are exercisable
until February 2, 1999 at $5.00 per share. The gross proceeds from the above
warrants, should they be fully converted, would amount to approximately $3.5
million.
<PAGE>
FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS MADE ABOVE, SOME OF WHICH ARE SUMMARIZED BELOW, ARE
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, AND
ACTUAL RESULTS MAY BE MATERIALLY DIFFERENT. FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENT INCLUDE (BUT ARE NOT LIMITED TO) THE FOLLOWING:
THE COMPANY ANTICIPATES CONTINUED GROWTH IN AUDIO TELECONFERENCING REVENUES WILL
CONTINUE IN ITS OPERATIONS IN NORTH AMERICA AND EUROPE. A significant downturn
in economic conditions generally or the development of alternative technologies
could render teleconferencing less effective and could affect the rate of growth
of audio teleconferencing revenues.
VIDEOCONFERENCING CONTINUES TO GROW IN TERMS OF BOTH THE QUALITY OF TRANSMISSION
AND DIVERSITY OF APPLICATION. Slower-than-expected development of the
videoconferencing market generally could slow the rate of sales growth of
videoconferencing hardware and services for the Company.
THE COMPANY BELIEVES THAT, GIVEN THE PRESENT RATE OF SALES AND PROFIT GROWTH IN
ITS CORE AUDIO TELECONFERENCING BUSINESS, IT HAS SUFFICIENT CASH RESOURCES TO
MEET ITS WORKING CAPITAL NEEDS FOR THE COMING YEAR. Failure to maintain ongoing
profit margins, resulting in a higher level of cash utilization, could result in
the Company deferring other expansion plans or could cause it to seek additional
financing in the capital markets for its future growth plans and working capital
needs.
THE COMPANY HAS FURTHER PLANS TO EXPAND ITS CAPACITY AND OPEN NEW OPERATIONS IN
NEW GEOGRAPHIC LOCATIONS, AND TO DEVELOP ITS VIDEOCONFERENCING BUSINESS. Lack of
borrowing or leasing capacity or the failure to generate high margin earnings
could delay the Company's forward growth plans.
THESE EXPANSION PLANS WILL BE FINANCED USING A MIX OF LEASE FINANCING FOR
CAPITAL EQUIPMENT AND EQUITY FINANCING AS APPROPRIATE. If the Company's common
stock declines substantially, the Company would need to seek other financing
such as a bank line of credit for its growth.
THE [M.a.T.S] TRANSACTION IS EXPECTED TO CLOSE BEFORE THE END OF 1997. The
transaction is subject to the fulfillment of certain conditions including
authority to be received from the U.K. Inland Revenue.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT INDEX
Exhibit No. Description
3.1(2) Restated Articles of Incorporation of the Company dated April
15, 1996
3.2(2) Bylaws of the Company, amended as of April 15, 1996
4.1(1) Form of specimen certificate for Common Stock of the Company
4.2(1) Form of Unit Purchase Option to be issued by the Company to
the Underwriter
4.3(1) Impound Agreement
4.4(1) Lock-up Letter Agreement
10.1(1) Stock Option Plan of 1991, as amended, authorizing 400,000
shares of Common Stock for issuance pursuant to the Plan
10.2(1) Form of Stock Option Agreement
10.3(1) Form of Common Stock Purchase Warrant
10.4(1) Form of Placement Agent Warrant
10.5(1) Denver West Office Building Lease dated April 1, 1993, by and
between Denver West Office Building No. 6 Venture and the
Company, as amended
10.6(1) Leases for United Kingdom facilities (First floor of Howard
House) dated September 29, 1993 and April 17, 1995, between
Garfunkel & Wanderer Limited and Reichwald Brothers
10.7(1) Letter agreement dated May 31, 1995 with Worldcom regarding
lease of Amsterdam facilities
10.8(1) Sublease Agreement with Integraf Corporation dated August 1995
for ACT Videoconferencing, Inc. premises
10.9(1) Term Loan Agreement dated August 11, 1994, between the Company
and Norwest Bank, N.A., Boulder Colorado
10.10(1) Split Dollar Insurance Agreement dated March 1, 1990, between
the Company and Gerald D. Van Eeckhout
10.11(1) Service Agreement dated April 10, 1992 between David Holden
and ACT Teleconferencing Limited
10.12(1) Stock Purchase Agreement dated July 13, 1995, between the
company and Paul Clifford for acquisition of NBS, Inc.
10.13(1) Employment Agreement dated July 14, 1995 between the Company
and Paul Clifford
10.14(1) Agreement between Company and Gerald D. Van Eeckhout limiting
his compensation in 1996 and 1997
10.15(1) Memorandum dated December 22, 1995 from director Seifert
amending Mr. Van Eeckhout's compensation
10.16(1) Terms of employment of Harry Walls, president-designate of ACT
Teleconferencing Services, Inc. per Company's letter dated
December 13, 1995
10.17(1) Agreement to Exchange Stock between Apogee Robotics, Inc. and
Company
10.18(2) Agreement between Company and Ronald J. Bach to borrow
proceeds from sale of Apogee Robotics common stock
10.19(3) Form of Stock Option Plan of 1996
27.1 Financial Data Schedule
(1) Exhibit incorporated by reference to the Company's Registration Statement on
Form SB-2, filed with the Securities and Exchange Commission on October 10,
1995, and amendments thereto. Exhibits incorporated by reference carry
exhibit numbers identical to those in the Registration Statement.
(2) Incorporated by reference to the exhibit of the same number to the Company's
Form 10-QSB for the Quarter ended June 30, 1996, File No. 0-27560.
(3) Incorporated by reference to the Company's Proxy Statement filed with the
Securities and Exchange Commission on April 30, 1997, File No. 0-27560.
REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter ended September
30, 1997.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ACT TELECONFERENCING, INC.
DATE: November 17, 1997 By: /s/ Gavin J. Thomson
-------------------------------------
Gavin J. Thomson,
Chief Financial Officer
(Duly authorized officer and
Principal Financial Officer)
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
3.1 Restated Articles of Incorporation of the Company dated April 15, 1996 Incorporated by reference
3.2 Bylaws of the Company, amended as of April 15, 1996 Incorporated by reference
4.1 Form of specimen certificate for Common Stock of the Company Incorporated by reference
4.2 Form of Unit Purchase Option to be issued by the Company to the
Underwriter Incorporated by reference
4.3 Impound Agreement Incorporated by reference
4.4 Lock-up Letter Agreement Incorporated by reference
10.1 Stock Option Plan of 1991, as amended, authorizing 400,000 shares of
Common Stock for issuance pursuant to the Plan Incorporated by reference
10.2 Form of Stock Option Agreement Incorporated by reference
10.3 Form of Common Stock Purchase Warrant Incorporated by reference
10.4 Form of Placement Agent Warrant Incorporated by reference
10.5 Denver West Office Building Lease dated April 1, 1993, by and between
Denver West Office Building No. 6 Venture and the Company, as amended Incorporated by reference
10.6 Leases for United Kingdom facilities (First floor of Howard House)
dated September 29, 1993 and April 17, 1995, between Garfunkel &
Wanderer Limited and Reichwald Brothers Limited, Landlord, and ACT
Teleconferencing Limited, Tenant Incorporated by reference
10.7 Letter agreement dated May 31, 1995 with Worldcom regarding lease of
Amsterdam facilities Incorporated by reference
10.8 Sublease Agreement with Integraf Corporation dated August 1995 for ACT
videoconferencing, Inc. premises Incorporated by reference
10.9 Term Loan Agreement dated August 11, 1994, between the Company and
Norwest Bank, N.A., Boulder, Colorado Incorporated by reference
10.10 Split Dollar Insurance Agreement dated March 1, 1990, between the
Company and Gerald D. Van Eeckhout Incorporated by reference
10.11 Service Agreement dated April 10, 1992 between David Holden and ACT
Teleconferencing Limited Incorporated by reference
10.12 Stock Purchase Agreement dated July 13, 1995, between the Company and
Paul Clifford for acquisition of NBS, Inc. Incorporated by reference
10.13 Employment Agreement dated July 14, 1995, between the Company and Paul
Clifford Incorporated by reference
10.14 Agreement between Company and Gerald D. Van Eeckhout limiting his
compensation in 1996 and 1997 Incorporated by reference
10.15 Memorandum dated December 22, 1995 from director Seifert amending Mr.
Van Eeckhout's compensation Incorporated by reference
10.16 Terms of employment of Harry Walls, president-designate of ACT
Teleconferencing Services, Inc. per Company's letter dated December
13, 1995 Incorporated by reference
10.17 Agreement to Exchange Stock between Apogee Robotics, Inc. and Company Incorporated by reference
10.18 Agreement between Company and Ronald J. Bach to borrow proceeds from
sale of Apogee Robotics common stock Incorporated by reference
10.19 Form of Stock Option Plan of 1996 Incorporated by reference
27.1 Financial Data Schedule Filed electronically
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED SEPTEMBER 30, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 796,971
<SECURITIES> 50,000
<RECEIVABLES> 2,449,142
<ALLOWANCES> 25,000
<INVENTORY> 133,365
<CURRENT-ASSETS> 3,672,334
<PP&E> 2,329,717
<DEPRECIATION> 966,095
<TOTAL-ASSETS> 6,233,573
<CURRENT-LIABILITIES> 2,035,125
<BONDS> 0
0
0
<COMMON> 5,651,385
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,233,573
<SALES> 7,235,069
<TOTAL-REVENUES> 7,235,069
<CGS> 3,244,360
<TOTAL-COSTS> 6,988,715
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 246,354
<INCOME-TAX> 219,435
<INCOME-CONTINUING> (125,554)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (125,554)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
