<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarterly Period Ended March 31, 1999
Commission File Number 1-2982
ANCOR COMMUNICATIONS, INCORPORATED
----------------------------------
(Exact name of issuer as specified in its charter)
Minnesota 41-1569659
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6130 Blue Circle Drive Minnetonka, Minnesota 55343
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(Address of principal executive offices) (Zip code)
Registrant's Telephone number, including area code (612) 932-4000
--------------
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 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 [ ]
24,081,331
----------
(Number of shares of common stock of the
registrant outstanding as of April 29, 1999)
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ANCOR COMMUNICATIONS, INCORPORATED
Form 10-Q
For the Quarterly Period Ended
March 31, 1999
Page
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PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Balance Sheets as of March 31, 1999 (unaudited)
and December 31, 1998 3
Statements of Operations for the three month period
ended March 31, 1999 and 1998 (unaudited) 4
Statements of Cash Flows for the three month periods
ended March 31, 1999 and 1998 (unaudited) 5
Notes to Financial Statements 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS 11
PART II - OTHER INFORMATION 12
2
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ANCOR COMMUNICATIONS, INCORPORATED
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,711,433 $ 3,477,236
Short-term investments 5,977,696 3,970,137
Accounts receivable, less allowances of $39,492
and $39,492, respectively 952,416 442,600
Inventories 1,613,249 1,288,868
Prepaid expenses and other current assets 73,925 110,398
------------ ------------
Total current assets 10,328,719 9,289,239
Equipment, net of accumulated depreciation 3,092,433 3,120,618
Patents, prepaid royalties, and other assets,
net of accumulated amortization 172,717 195,668
Capitalized software development costs
net of accumulated amortization 61,293 132,568
------------ ------------
TOTAL ASSETS $ 13,655,162 $ 12,738,093
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 110,556 $ 139,791
Accounts payable 1,102,309 448,383
Accrued liabilities 779,725 955,676
Unearned revenue, current 2,061,241 2,146,936
------------ ------------
Total current liabilities 4,053,831 3,690,786
Long-term unearned revenue, less current 6,398,020 3,727,919
Long-term debt, less current maturities 95,171 110,997
Shareholders' Equity
Preferred stock, par value $.01 per share,
authorized 5,000,000 shares; issued and outstanding
Series C, 25 shares in 1999 and 229 in 1998 0 2
Common stock, par value $.01 per share,
authorized 40,000,000 shares; issued and outstanding
24,071,331 shares in 1999 and 23,265,819 shares in 1998 240,713 232,658
Additional paid-in capital 46,620,342 46,566,386
Accumulated deficit (43,752,915) (41,590,655)
------------ ------------
Total shareholders' equity 3,108,140 5,208,391
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,655,162 $ 12,738,093
============ ============
</TABLE>
See notes to Financial Statements
3
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ANCOR COMMUNICATIONS, INCORPORATED
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------------
1999 1998
------------ ------------
Net sales $ 1,519,713 $ 1,042,227
Cost of goods sold 664,805 699,608
------------ ------------
Gross profit 854,908 342,619
Operating expenses
Selling, general and administrative 1,751,833 1,711,117
Research and development 1,326,587 1,449,206
------------ ------------
Total operating expenses 3,078,420 3,160,323
------------ ------------
Operating loss (2,223,512) (2,817,704)
Nonoperating income (expense)
Interest expense (6,183) (13,055)
Other, primarily interest income 67,435 65,739
------------ ------------
Net loss (2,162,260) (2,765,020)
Accretion on convertible preferred stock (7,681) (151,287)
------------ ------------
Net loss attributable to common shareholders $ (2,169,941) $ (2,916,307)
============ ============
Basic and diluted net loss per common share $ (0.09) $ (0.25)
============ ============
Weighted average common shares outstanding 24,002,103 11,884,248
============ ============
See notes to Financial Statements
4
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ANCOR COMMUNICATIONS, INCORPORATED
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (2,162,260) $ (2,765,020)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 380,031 307,087
Changes in current assets and liabilities:
Accounts receivable (509,816) 366,385
Inventories (324,381) (694,799)
Prepaid expenses and other 36,473 8,186
Accounts payable 653,926 586,257
Accrued liabilities (175,951) 91,087
Unearned revenue 2,584,406 1,000
------------ ------------
Net cash provided by (used in) operating activities 482,428 (2,099,817)
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of equipment (252,487) (121,611)
Purchase of short-term investments (5,997,172) (9,875,532)
Sale of short-term investments 3,989,613 1,992,859
Decrease in other, net (5,133) (4,936)
------------ ------------
Net cash used in investing activities (2,265,179) (8,009,220)
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (45,061) (52,015)
Net proceeds from sale of preferred stock -- 10,254,375
Net proceeds from sale of common stock
and exercise of options 62,009 51,295
------------ ------------
Net cash provided by financing activities 16,948 10,253,655
------------ ------------
Net increase (decrease) in cash (1,765,803) 144,618
Cash, beginning of period 3,477,236 2,001,404
------------ ------------
Cash, end of period $ 1,711,433 $ 2,146,022
============ ============
Supplemental Schedule of Noncash Investing
and Financing Activities:
Equipment acquired under capital lease $ -- $ 173,845
============ ============
</TABLE>
See notes to Financial Statements
5
<PAGE>
ANCOR COMMUNICATIONS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
In the opinion of management, the interim financial statements include all
adjustments necessary for a fair presentation of the results of operations for
the interim periods presented. Operating results for the three months ended
March 31, 1999 are not necessarily indicative of the operating results to be
expected for the year ending December 31, 1999.
Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
condensed or omitted.
NOTE 2 - INVENTORIES
Inventories at March 31, 1999 and December 31, 1998 consisted of:
1999 1998
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Raw materials $ 4,206,260 $ 4,031,546
Finished goods consigned to
customers and others 797,643 779,054
Finished goods 1,576,984 1,289,577
Reserve for obsolescence (4,967,638) (4,811,309)
----------------------------
$ 1,613,249 $ 1,288,868
============================
NOTE 3 - NET LOSS PER SHARE
The Company computes net loss per common share based upon the weighted average
number of common shares outstanding during the year. Potential common shares,
consisting of options, warrants and convertible preferred stock for all periods,
were not included in the computation as their effect was antidilutive. Premiums
earned by preferred shareholders are included in the net loss attributable to
common shareholders computation. Basic and diluted loss per-share amounts are
the same in each period presented.
NOTE 4 - CONTINGENCY
The Company is a defendant in a lawsuit brought by Hoyt Properties, Inc.
("Hoyt") venued in Hennepin County District Court in the State of Minnesota.
Hoyt, as Landlord, and the Company, as Tenant, entered into an Agreement on May
29, 1998 which provided that Hoyt would build and lease to the Company an office
building to be located in Eden Prairie, Minnesota, subject to certain
contingencies, conditions, and agreements. Hoyt claims that the Company breached
the Agreement, and asserts damanges in excess of $2,500,000. The Company denies
all liability, and alleges that Hoyt refused to provide improvements desirable
and necessary to the Company's occupancy of the proposed leased space, and
multiple contingencies, conditions, and agreements did not occur and no binding
agreement exists. The Company is vigorously defending the case. There has been
limited discovery completed to date. However, there is no assurance that any
judgment, order or decree against the Company arising out of this action will
not have a material adverse effect on the Company or its business. The Company
is unable to determine at this time if there will be a material adverse outcome.
No provision has been made for any loss that may occur as a result of an adverse
outcome of the suit.
See notes to Financial Statements
6
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NOTE 5 - UNEARNED REVENUE
On September 24, 1998 the Company entered into a technology licensing agreement
with Inrange Technologies Corporation ("Inrange"), a unit of General Signal
Corporation. Under the agreement, Inrange is to pay the Company $9,000,000 in
three equal installments: on September 25, 1998, December 15, 1998, and March
31, 1999. The $9,000,000 is comprised of (i) approximately $6,200,000 for
licensing fees; (ii) approximately $800,000 in warrants to purchase 750,000
shares of the Company's common stock at prices prices ranging from $2.50 to
$10.00; and (iii) $2,000,000 of prepaid royalties. The $6,200,000 will be
recognized as revenue evenly over the term of the agreement which is 60 months
and the $2,000,000 royalty will be recorded as revenue as Inrange products ship
and royalties are earned. As of March 31, 1999, the Company has received all
three $3,000,000 payments, totalling $9,000,000. This amount, reduced by the
value of the warrants granted, and further reduced by six months of revenue
recognized, has been recorded as unearned revenue in the first quarter financial
statements.
See notes to Financial Statements
7
<PAGE>
ITEM 2
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
For the three months ended March 31, 1999 and 1998.
The following table sets forth, for the periods indicated, certain statements of
operations data as a percentage of net sales.
For the Three Months
Ended March 31
----------------------
1999 1998
------ ------
Net sales 100.0% 100.0%
Cost of goods sold 43.7 67.1
Gross profit 56.3 32.9
Operating expenses:
Selling, general & admin. 115.3 164.2
Research & development 87.3 139.0
Total operating expenses 202.6 303.2
Operating loss (146.3) (270.4)
Other income (expense)
Interest expense (0.4) (1.3)
Other, net 4.4 6.3
------ ------
Net loss (142.3)% (265.3)%
====== ======
Net Sales. Net sales for the first quarter 1999 increased by approximately
$447,000 (46%) from 1998 to approximately $1,520,000. The increase in net sales
is attributable to (i) an increase in the shipments of the Company's MKII Fibre
Channel switches to Original Equipment Manufacturer ("OEM") customers as a
result of the Company's shift in marketing focus to opportunities in the storage
area network, offset by decreases in sales to the Company's Japanese
distributors; and (ii) to the license fee revenue of approximately $312,000 from
INRANGE Technologies Corporation ("INRANGE"). Domestic net sales increased
approximately $912,000 (236%) to approximately $1,297,000 due to the above.
International net sales in the first quarter decreased approximately $434,000
(66%) to approximately $223,000 due primarily to decreased sales to the
Company's Japanese distributors. Future sales to the Company's current Japanese
distributor, Netmarks, Inc., are uncertain.
8
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Gross Profit. Gross profit in the first quarter of 1999 increased to
approximately $855,000, or 56.3% of sales, from of approximately $343,000, or
32.9% of sales, in the first quarter of 1998. Gross profit is not only affected
by sales volume and the direct cost thereof, but is also affected by indirect
costs, such as normal scrap and overhead allocations, the percentage impact of
which is decreased as sales increase. Gross profit percentage is also impacted
by the mix of product sold within a period. In general, adapter cards have lower
margins than switch and service revenue and different switch types have
different margins. The increase in gross profit for 1999 was due primarily to
the increased sales volume. The gross profit percentage was positively impacted
because (i) indirect costs remained relatively constant; and (ii) the mix of
product sold during the period carried greater margins than that sold in the
comparable periods in 1998, particularly the revenue from INRANGE. The INRANGE
license fee revenue positively impacts margins as substantially all the costs to
develop the licensed technology were expended in prior years, and thus raises
the overall gross profit percentage.
Operating Expense. The Company's operating expenses for the first quarter
of 1999 were approximately $3,078,000, or 202.6% of net sales, compared to
approximately $3,160,000, or 303.2% of net sales, in the first quarter of 1998.
The Company believes that the level of expense incurred is appropriate to
address the opportunities available to it in the storage area and
high-performance networking marketplaces. Total operating expenses remained
relatively constant, decreasing only slightly as a result of an increase in the
cost for personnel offset by decreased product development expenses. The Company
experienced a 17% net growth in personnel, particularly in engineering
positions, resulting in personnel and related expenses increasing approximately
$260,000 in the first quarter of 1999 as compared with the same period of 1998.
This was offset by a decrease of approximately $280,000 in the first quarter
1999 from the same period of 1998 in expenses related to product development and
enhancements.
Other Income (Expense) Interest expense decreased to $6,183 in the first
quarter 1999 from $13,055 in the first quarter 1998 as the Company completed its
obligations on certain capitalized leases. Interest income of approximately
$67,000 in the first quarter of 1999 was earned from the investment of available
cash balances. The $66,000 of interest in the first quarter of 1998 was earned
from the investment of the net proceeds of the preferred stock offering
occurring in February of 1998.
Liquidity and Capital Resources
The Company's cash, cash equivalents and short-term investments were
approximately $7,689,000 as of March 31, 1999, compared to approximately
$7,447,000 as of December 31, 1998. For the three months ended March 31, 1999,
cash flows provided by operating activities totaled approximately $482,000, due
primarily to the third and final $3,000,000 installment received under the
technology licensing agreement with INRANGE, offset by the operating loss. For
the three months ended March 31, 1999, cash flows used in investing activities
totaled approximately $2,265,000 primarily as a result of the purchase of
short-term investments of available cash balances.
The Company believes that the proceeds received from the INRANGE agreement,
together with interest earned thereon, and anticipated revenues from operations
will provide adequate liquidity to fund growth, operations, and capital
expenditures for 1999. However, the Company aniticipates the need to secure
additional financing in order to fund operating and working capital
9
<PAGE>
requirements thereafter. There can be no assurance that additional financing can
be obtained with terms acceptable to the Company. Any additional equity
financings may be dilutive to existing shareholders, and any debt financing may
contain restrictive covenants. The Company's inability to obtain additional
financing if and when needed could adversely affect the Company and its
operations.
Litigation. The Company is a defendant in a lawsuit brought by Hoyt
Properties, Inc. ("Hoyt") venued in Hennepin County District Court in the State
of Minnesota. Hoyt, as Landlord, and the Company, as Tenant, entered into an
Agreement on May 29, 1998 which provided that Hoyt would build and lease to the
Company an office building to be located in Eden Prairie, Minnesota, subject to
certain contingencies, conditions, and agreements. Hoyt claims that the Company
breached the Agreement, and asserts damages in excess of $2,500,000. The Company
denies all liability, and alleges that Hoyt refused to provide improvements
desirable and necessary to the Company's occupancy of the proposed leased space,
and multiple contingencies, conditions, and agreements did not occur and no
binding agreement exists. The Company is vigorously defending the case. There
has been limited discovery completed to date. However, there is no assurance
that any judgment, order or decree against the Company arising out of this
action will not have a material adverse effect on the Company or its business.
The Company is unable to determine at this time if there will be a material
adverse outcome. No provision has been made for any loss that may occur as a
result of an adverse outcome of the suit
Year 2000 Issue. The Company has completed an assessment of Year 2000
compliance for its critical operating and application systems, specifically its
enterprise-wide information systems, analysis tools, computer-aided design
systems and supporting operating system infrastructure. As a result of this
assessment, it has been determined that through normal recurring system
upgrades, the vast majority of the Company's systems are currently, or will be
by third quarter 1999, Year 2000 compliant. During 1996 the Company purchased
from a world-wide supplier and developer of information systems an
enterprise-wide information system. The developer of this information system has
provided its clients written assurance that the system will correctly function
across the year 2000, as verified by previous system tests and Year 2000
certification by the International Technology Association of America.
Additionally, the Company's products, including software, are not date sensitive
as to functionality. Since Year 2000 compliance with regard to the Company's
internal systems has been, or will be, significantly achieved through normal
system upgrades and not through accelerated or dedicated efforts, the costs of
becoming Year 2000 compliant has not had and is not expected to have a material
effect on the Company's financial position, operations or cash flow.
Ultimately, the potential impact of the Year 2000 issue will depend not only on
the Company's internal Year 2000 compliance, but also on the way in which the
Year 2000 is addressed by customers, vendors, service utilities, government and
other external entities. The Company is communicating with such external parties
to determine how they are addressing the Year 2000 issue and to evaluate any
likely impact on the Company. The Company has requested commitment dates from
these parties as to their Year 2000 readiness. The efforts of third parties are
not within the Company's control, however, and their failure to remedy Year 2000
issues successfully could result in business disruption, loss of revenue and
increased operating cost. At the present time, it is not possible to determine
whether any such events are likely to occur, or to quantify any potential
negative impact they may have on the Company's future results of operations and
financial condition. The Company has not currently established contingency
plans, but has established a committee which is currently assessing its need for
such plans.
10
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The foregoing discussion regarding Year 2000 contains forward-looking statements
which are based on management's best estimates derived using various
assumptions. These forward-looking statements involve inherent risks and
uncertainties, and actual results could differ materially from those
contemplated by such statements. Factors that might cause material differences
include, but are not limited to, (i) the Company's ability to obtain alternative
manufacturing sources should its current sources' operations be disrupted due to
Year 2000 complications, and (ii) the Company's ability to respond to unforeseen
Year 2000 complications. Such material differences could result in, among other
things, business disruption, operational problems, financial loss, legal
liability and similar risks.
Safe Harbor Cautionary Statement
Statements made in this Management's Discussion and Analysis that are not
historical in nature, including statements regarding the level of future
revenues and expenses, are "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995 and are subject to risks and
uncertainties. Factors that may affect the Company's future performance and
results are set forth in the Company's filings with the Securities and Exchange
Commission and include the level of market acceptance of Fibre Channel
technology and the Company's products and the timing of such acceptance, the
ability of the Company to successfully market and sell its products to OEMs and
others, the Company's ability to compete with others providing Fibre Channel
technology, the timing of customer orders, including whether customers will
purchases products form the Company at the rates and times projected by those
customers, the success of the products incorporating the Company's technology
marketed by INRANGE, the ability of the Company to develop enhancements to its
products and technology and keep pace with technological developments, the
Company's ability to manage growth, the Company's ability to attract and retain
qualified personnel and the ability of the Company's products to interoperate
with products manufactured by others. Retention of $2.0 million of prepaid
royalties from INRANGE is contingent upon the Company's completion of certain
deliverables defined in the Company's technology license agreement with INRANGE.
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company has no history of, and does not anticipate in the future, investing
in derivative financial instruments, derivative commodity instruments or other
such financial instruments. Contracts with international customers are entered
into in US dollars, precluding the need for foreign currency hedges.
Additionally, the Company invests in money market funds and in U.S. government
obligations (primarily U.S. Treasury bills) which experience minimal volatility.
Thus, the exposure to market risk is immaterial.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is a defendant in a lawsuit brought by Hoyt Properties,
Inc. ("Hoyt") venued in Hennepin County District Court in the State of
Minnesota. Hoyt, as Landlord, and the Company, as Tenant, entered into
an Agreement on May 29, 1998 which provided that Hoyt would build and
lease to the Company an office building to be located in Eden Prairie,
Minnesota, subject to certain contingencies, conditions, and
agreements. Hoyt claims that the Company breached the Agreement, and
asserts damages in excess of $2,500,000. The Company denies all
liability, and alleges that Hoyt refused to provide improvements
desirable and necessary to the Company's occupancy of the proposed
leased space, and multiple contingencies, conditions, and agreements
did not occur and no binding agreement exists. The Company is
vigorously defending the case. There has been limited discovery
completed to date. However, there is no assurance that any judgment,
order or decree against the Company arising out of this action will not
have a material adverse effect on the Company or its business. The
Company is unable to determine at this time if there will be a material
adverse outcome. No provision has been made for any loss that may occur
as a result of an adverse outcome of the suit.
Item 2. Changes in Securities.
(a.) None.
(b.) None.
(c.) None.
Item 3 Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a.) Exhibits
3.1(a) Second Amended and Restated Articles of
Incorporation of the Company.
3.2(a) Amended Bylaws of the Company.
12
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3.3(k) Amendment to Second Amended and Restated Articles of
Incorporation of the Company relating to an increase of the
number of authorized shares.
3.4(m) Amendment to Bylaws adopted October 21, 1998.
4.1(a) Loan and Warrant Purchase Agreement, dated as of June 24,
1992, between Ancor Communications, Incorporated and
International Business Machines Incorporated.
4.2(a) Agreement and Amendment to Loan and Warrant Purchase
Agreement, dated March 10, 1994, by and among Ancor
Communications, Incorporated, International Business
Machines Corporation and IBM Credit Corporation.
4.3(b) Second Amendment to Loan and Warrant Purchase Agreement
dated April 25, 1994, by and among Ancor Communications,
Incorporated, International Business Machines Corporation
and IBM Credit Corporation.
4.4(a) Shareholders Agreement, dated as of June 24, 1992, among
Ancor Communications, Incorporated, International Business
Machines Incorporated and the shareholders of the Company
named on the signature page thereto.
4.5(c) Representative's Warrant.
4.6 [Reserved.]
4.7(d) Form of Warrant issued April 28, 1995.
4.8 [Reserved.]
4.9(e) Form of Warrant issued to John G. Kinnard & Company on
October 23, 1995.
4.10(f) Certificate of Designation of Series A Preferred Stock.
4.11(f) Form of Warrant issued to Swartz Investments, Inc. on March
7, 1996.
4.12(g) Form of Warrant issued to Dunwoody Brokerage Services, Inc.
on March 24, 1997.
4.13(g) Form of Warrant issued to Purchasers of the Company's Series
B Preferred Stock.
13
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4.14(g) Certificate of Designation of Series B Preferred Stock.
4.15(i) Certificate of Designation of Series C Preferred Stock.
4.16(j) Form of Warrant issued to Dunwoody Brokerage Services, Inc.
on February 19, 1998.
4.17(l) Form of Warrant issued to Inrange Technologies, Inc. on
September 24, 1998.
10.1 [Reserved.]
*10.2(a) Ancor Communications, Incorporated 1990 Stock Option Plan.
*10.3(a) Ancor Communications, Incorporated 1994 Long-Term Incentive
and Stock Option Plan.
10.4 [Reserved.]
*10.5(a) Employment Agreement, dated January 1, 1994, between Ancor
Communications, Incorporated and Stephen C. O'Hara.
10.6 [Reserved.]
10.7 [Reserved.]
10.8(a) Sublease, dated March 29, 1988, by and between Anderson
Cornelius and Unisys Corporation, formerly known as
Burroughs Corporation.
10.9(a) Sublease, Amendment Agreement, dated March 8, 1989, by and
between Anderson Cornelius and Unisys Corporation, formerly
known as Burroughs Corporation.
10.10(a) Sublease, Amendment Agreement, dated August 31, 1992, by and
between the Company and Unisys Corporation, formerly known
as Burroughs Corporation.
10.11 [Reserved.]
10.12 [Reserved.]
10.13 [Reserved.]
10.14 [Reserved.]
10.15 [Reserved.]
14
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10.16 [Reserved.]
*10.17(e) Ancor Communications, Inc. 1995 Employee Stock Purchase
Plan.
*10.18(m) Amendment to Ancor Communications, Inc., 1995 Employee Stock
Purchase Plan, effective September 1, 1998.
*10.19(e) Ancor Communications, Inc. Non-Employee Director Stock
Option Plan.
10.20 [Reserved.]
10.21 [Reserved.]
10.22 [Reserved.]
10.23(g) Form of Subscription Agreement between the Company and
Purchasers of the Company's Series B Preferred Stock (March
1997).
10.24(g) Registration Rights Agreement dated March 24, 1997 between
the Company, Swartz Investments, Inc. and Purchasers of the
Company's Series B Preferred Stock.
*10.25(h) Letter Employment Agreement with Kenneth E. Hendrickson
dated July 25, 1997.
*10.26(h) Letter Employment Agreement with Steven E. Snyder dated
September 23, 1997.
10.27(i) Form of Subscription Agreement, dated as of February 19,
1998, between Ancor Communications, Incorporated and each
purchaser of Series C Preferred Stock.
10.28(i) Registration Rights Agreement, dated as of February 19,
1998, by and between Ancor Communications, Incorporated, the
placement agent and each purchaser of Series C Preferred
Stock.
*10.29(j) Termination of Employment Agreement dated August 29, 1997,
between the Company and Dale C. Showers.
10.30(j) Sublease, Amendment Agreement, dated February 11, 1998, by
and between the Company and Unisys Corporation, formerly
known as Burroughs Corporation.
15
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*10.31(j) Separation and General Release Agreement between the Company
and Lee B. Lewis.
*10.32(j) Amendments to Ancor Communications, Inc. Non-Employee
Director Stock Option Plan filed as exhibit 10.18.
27.1(n) Financial Data Schedule.
- ----------
* Indicates management contract or compensatory plan or agreement.
(a) Incorporated by reference to the Company's Registration Statement on form
SB-2 filed March 11, 1994.
(b) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on form SB-2 Filed April 28, 1994.
(c) Incorporation by reference to the Company's Form 10-QSB filed for the
quarterly period ended March 31, 1994.
(d) Incorporated by reference to the Company's form 10-QSB filed for the
quarterly period ended March 31, 1995.
(e) Incorporated by reference to the Company's form 10-QSB filed for the
quarterly period ended September 30, 1995.
(f) Incorporated by reference to the Company's Form 10-KSB filed for the fiscal
year ended December 31, 1995.
(g) Incorporated by reference to the Company's form 10-Q filed for the
quarterly period ended March 31, 1997.
(h) Incorporated by reference to the Company's form 10-Q filed for the
quarterly period ended September 30, 1997.
(i) Incorporated by reference to the Company's form 8-K filed February 23,
1998.
(j) Incorporated by reference to the Company's Form 10-K filed for the fiscal
year ended December 31, 1997.
(k) Incorporated by reference to the Company's form 10-Q filed for the
quarterly period ended June 30, 1998.
16
<PAGE>
(l) Incorporated by reference to the Company's form 10-Q filed for the
quarterly period ended September 30, 1998.
(m) Incorporated by reference to the Company's Form 10-K filed for the fiscal
year ended December 31, 1998.
(n) Included herewith.
(b.) Reports on Form 8-K
None.
17
<PAGE>
SIGNATURES
In accordance with 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.
ANCOR COMMUNICATIONS, INCORPORATED
Dated: May 13, 1999 By /s/ Kenneth E. Hendrickson
------------------------------
Kenneth E. Hendrickson
Chairman of the Board &
Chief Executive Officer
Dated: May 13, 1999 By /s/ Steven E. Snyder
------------------------------
Steven E. Snyder
Vice President, Chief Financial
Officer & Secretary
18
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
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<SECURITIES> 5,977,696
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<ALLOWANCES> (39,492)
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0
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