<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended - SEPTEMBER 30, 1998
------------------
Commission File No. 000-21325
Mansur Industries Inc.
------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
8305 N.W. 27th Street, Suite 107
Miami, Florida 33122
------------------
(Address of Principal Executive Offices)
(305) 593-8015
-----------------
(Issuer's Telephone Number, Including Area Code)
Florida 65-0226813
- - ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of the Registrant's common stock, par value $.001 per
share, outstanding as of the close of business on October 31, 1998 was 4,601,309
shares.
<PAGE> 2
MANSUR INDUSTRIES INC
INDEX TO FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 1998
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets-
As of September 30, 1998 (unaudited) and December 31, 1997 (audited)
Condensed Statements of Operations- For the three and nine months
ended September 30, 1998 and 1997 (unaudited)
Condensed Statements of Cash Flows-
For the nine months ended September 30, 1998 and 1997 (unaudited)
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
MANSUR INDUSTRIES INC.
CONDENSED BALANCE SHEETS
September 30, 1998 (unaudited) and December 31, 1997 (audited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
(Unaudited) (Audited)
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,567 $ 2,243
Accounts receivable 1,384 1,006
Inventories, net 3,325 1,824
Other assets 359 214
---------- ----------
Total current assets 13,635 5,287
Property and equipment, net 2,368 1,355
Intangible assets, net 103 72
Other assets 1,238 74
---------- ----------
Total assets $ 17,344 $ 6,788
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 1,775 $ 759
Deferred revenue 213 170
Interest payable -- 2
Current installments of obligations under capital leases 190 153
---------- ----------
Total current liabilities 2,178 1,084
Long-term debt, excluding current installments 18,446 502
---------- ----------
Total liabilities 20,624 1,586
Stockholders' equity (deficit):
Common stock, $0.001 par value. Authorized 25,000,000
shares, issued and outstanding 4,601,309 shares for
1998 and 1997 5 5
Additional paid-in capital 11,116 11,116
Accumulated deficit (14,401) (5,919)
---------- ----------
Total stockholders' equity (deficit) (3,280) 5,202
---------- ----------
Total liabilities and stockholders' equity (deficit) $ 17,344 $ 6,788
========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE> 4
MANSUR INDUSTRIES INC.
CONDENSED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 1998 and 1997
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 2,006 $ 3,780 $ 4,533 $ 6,278
Cost of sales 1,108 2,355 3,022 3,962
------------ ------------ ------------ ------------
Gross margin 898 1,425 1,511 2,316
Operating expenses:
Research and product development 66 72 214 251
Sales, general and administrative 4,780 810 9,144 2,015
------------ ------------ ------------ ------------
4,846 882 9,358 2,266
------------ ------------ ------------ ------------
Income (loss) from operations (3,948) 543 (7,847) 50
Interest income (expense), net (297) 25 (634) 129
------------ ------------ ------------ ------------
Net income (loss) $ (4,245) $ 568 $ (8,481) $ 179
============ ============ ============ ============
Basic and diluted net income (loss)
per share $ (0.92) 0.12 $ (1.84) $ 0.04
============ ============ ============ ============
Weighted-average of common shares
outstanding 4,601,309 4,601,309 4,601,309 4,601,309
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE> 5
MANSUR INDUSTRIES INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1998 and 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
---------- ----------
<S> <C> <C>
Cash used in operating activities:
Net income (loss) $ (8,481) $ 179
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 171 58
Inventory reserve 500 --
Changes in operating assets and liabilities:
Increase in inventory (2,001) (428)
Increase in accounts receivable (377) (3,369)
Increase in other assets (1,310) (341)
Increase in intangible assets (33) (15)
Increase in accounts payable and accrued expenses 1,058 995
---------- ----------
Net cash used in operating activities (10,473) (2,921)
---------- ----------
Cash used in investing activities:
Capital expenditures (1,182) (214)
---------- ----------
Net cash used in investing activities (1,182) (214)
Cash provided from (used in) financing activities:
Proceeds from issuance of convertible debt 17,000 --
Interest on convertible debt 867 --
Proceeds from capital lease obligation 234 22
Principal payments under capital lease obligations (122) (41)
---------- ----------
Net cash provided from (used in) financing activities 17,979 (19)
---------- ----------
Net increase (decrease) in cash and cash equivalents 6,324 (3,154)
Cash and cash equivalents, beginning of period 2,243 5,321
---------- ----------
Cash and cash equivalents, end of period $ 8,567 $ 2,167
========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE> 6
MANSUR INDUSTRIES INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (UNAUDITED)
AND DECEMBER 31, 1997 (AUDITED)
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING
PRONOUNCEMENTS
Mansur Industries Inc. (the "Company") is primarily engaged in the manufacture,
marketing and sale of industrial parts cleaning equipment for use in the
automotive, marine, airline and general manufacturing industries. The Company's
focus is on the design, development and manufacture of industrial cleaning
equipment which incorporate continuous recycling and recovery technologies for
solvents and solutions, thereby reducing the need to replace and dispose of
contaminants.
(1) BASIS OF PRESENTATION
The accompanying unaudited interim condensed financial statements have been
prepared pursuant to the rules and regulations for reporting on Form 10-QSB.
Accordingly, certain information and footnotes required by generally accepted
accounting principles for complete financial statements are not included
herein. The interim condensed statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB as filed with the Securities and Exchange Commission for the
year ended December 31, 1997.
Interim condensed statements are subject to possible adjustments in connection
with the annual audit of the Company's accounts for the full year 1998; in the
Company's opinion, all adjustments necessary for a fair presentation of these
interim condensed statements have been included and are of a normal and
recurring nature.
(2) SUBORDINATED CONVERTIBLE NOTES
In February 1998, the Company consummated a private placement (the "Private
Placement") of an aggregate of $17.0 million in principal amount of the
Company's 8 1/4% Subordinated Convertible Notes due 2003 (the "Notes")
generating net proceeds of $15.7 million. Interest on the Notes is payable
semi-annually and during the first two years is payable through the Company's
issuance of additional Notes and thereafter, at the election of the Company, is
payable either in cash or through the issuance of additional Notes. The Notes
are convertible by the holders thereof into shares of the Company's common
stock, $.001 par value (the "Common Stock"), at a conversion price equal to
$17.00 per share (the "Conversion Price") and automatically converts into shares
of Common Stock after February 23, 1999, if the closing price of the Common
Stock, as reported on the Nasdaq SmallCap Market (as defined herein), exceeds
175% of the Conversion Price for a period of twenty consecutive trading days,
including the twenty trading days immediately preceding February 23, 1999. The
Company may redeem the Notes after February 23, 2001 under certain
circumstances. The Company has used and will continue to use the proceeds of
the Private Placement to expand manufacturing operations, continue the
development of its direct marketing and distribution organization, and for
working capital and general corporate purposes.
(3) SIGNIFICANT COMMITMENTS
As of November 1, 1998 the Company had open purchase orders of approximately
$1.1 million for component part inventory. This inventory will be used to build
finished goods inventory over the next quarter for resale to potential
customers.
<PAGE> 7
(4) NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"), which establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains, and losses)
in a full set of general-purpose financial statements. This statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income, be reported in a financial statement that
is displayed with the same prominence as other financial statements. This
statement is effective for fiscal years beginning after December 15, 1997. The
Company adopted SFAS No. 130 during the three months ended March 31, 1998 and
determined that there is no material impact to the Company's financial and
notes thereto.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" ("SFAS No. 131"). This Statement supersedes
Statement of Financial Accounting Standards No. 14 and parts of various other
statements and provides accounting guidance for reporting information about
operating segments in annual financial statements by public business
enterprises and requires such enterprises to report selected information about
operating segments in interim financial reports. The Statement uses a
"management approach" to identify operating segments. Reportable segments are
operating segments that meet specified quantitative thresholds. The statement
also uses a "management approach" for determining some of the information
required to be disclosed. This statement is effective for fiscal years
beginning after December 15, 1997. The Company adopted SFAS No. 131 during the
three months ended March 31, 1998 and determined that there is no material
impact to the Company's financial statements and notes thereto.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction with the
condensed Financial Statements, including the notes thereto, contained elsewhere
in this 10-QSB and the Company's Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission for the fiscal year ended December 31, 1997.
GENERAL
The Company was incorporated in November 1990 and, as a development stage
company, devoted substantially all of its resources to research and development
programs related to its full line of self contained, recycling industrial parts
washers until June 1996. The Company commenced its planned principal operations
in July 1996.
Since July 1996, the Company has made its SystemOne(R) Washer and services
available to the public through a third party leasing program and through
direct sale of the equipment. Under the third party leasing program, the
Company recognizes revenue from the sale of parts washers at the time the
equipment is delivered by the Company. In general, the revenue recognized
approximates the discounted present value of the payment stream related to the
underlying lease.
In January 1997, following a four-month test program, the Company entered into
a sales representative agreement with First Recovery, an affiliate of Ashland,
Inc. (the "Representation Agreement"), pursuant to which First Recovery served
as the Company's exclusive distributor of the SystemOne(R) Washers in 21
metropolitan areas. The Representation Agreement replaced the Company's
original limited pilot program with First Recovery covering the Dallas and
Houston, Texas markets.
In December 1997, the Company entered into a Purchase and Distribution
Agreement with First Recovery (the "Purchase and Distribution Agreement"),
which agreement replaced the Representation Agreement and extended the
exclusive distribution relationship of the parties in a limited territory
through June 1998. Pursuant to the Purchase and Distribution Agreement, First
Recovery was granted the exclusive right to purchase SystemOne(R) Washers from
the Company and market and distribute such products through sale or lease in a
territory consisting of 21 major metropolitan markets throughout the United
States and to national customers operating in more than one state and in more
than fifteen locations. Within the State of Florida, during the term of the
Purchase and Distribution Agreement, First Recovery had the right to solicit
trial placements of SystemOne(R) Washers on behalf of the Company as a
commissioned sales agent only. Although the Company intends to continue to
evaluate and discuss a long-term distribution agreement or other strategic
alliance with First Recovery or with other potential strategic partners, the
Company's immediate focus is on the completion of the development of its direct
marketing and distribution organization. There can be no assurance that the
Company will have any continuing relationship with First Recovery.
In an effort to enhance long-term profitability, preserve strategic
opportunities and maximize value for its shareholders, in November 1997, the
Company commenced the development of a direct marketing and distribution
organization for its SystemOne(R) product line. The Company has been ramping up
its direct marketing and distribution capabilities and expects that the
investment in its direct distribution infrastructure will result in a long-term
operating strategy that maximizes market share through aggressive factory direct
pricing and increases operating profits. No assurance can be given that the
Company's efforts in establishing direct marketing and distribution capabilities
will be completed, or if completed, will be successful.
During the period from July 1996 through September 30, 1998, the Company had
sold approximately 5,000 SystemOne(R) Washers, of which 1,739 were sold during
the nine months ended September 30, 1998.
<PAGE> 9
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997
Revenues decreased by $1,774,000, or 46.9%, to $2,006,000 for the three months
ended September 30, 1998 from $3,780,000 for the three months ended September
30, 1997. Revenues for the three months ended September 30, 1998 were comprised
entirely of direct sales through the Company's developing direct distribution
infrastructure. In contrast, revenues for the three months ended September 30,
1997 were comprised entirely of one large order from a single third party
distributor.
Cost of goods sold decreased by $1,247,000, or 53.0%, to $1,108,000 for the
three months ended September 30, 1998 from $2,355,000 for the three months
ended September 30, 1997. As a percentage of net sales, cost of goods sold
represented 55.2% and 62.3% for the three months ended September 30, 1998 and
1997, respectively.
Selling, general and administrative expenses for the three months ended
September 30, 1998 were $4,780,000, an increase of $3,970,000, or 490.1%,
compared to selling, general and administrative expenses of $810,000 for the
three months ended September 30, 1997. The increase in selling, general and
administrative expenses was primarily the result of the hiring of additional
personnel in connection with the Company's ramping up of its direct marketing
and distribution capabilities, establishing support centers and leasing
additional manufacturing capacity in order to support the Company's increased
production.
The Company's research and development expenses decreased by $6,000 from $72,000
during the three months ended September 30, 1997 to $66,000 for the three months
ended September 30, 1998, primarily due to reduced basic and applied research in
1998.
The Company recognized interest income (expense), net of $(297,000) for the
three months ended September 30, 1998, compared to interest income (expense),
net of $25,000 for the three months ended September 30, 1997. The interest
income for the three months ended September 30, 1997 was primarily due to the
investment of the proceeds from the Company's initial public offering of Common
Stock (the "IPO") in October 1996. The interest expense for the three months
ended September 30, 1998 was primarily due to the interest accrued on the Notes
sold by the Company in the Private Placement in February 1998.
As a result of the foregoing, the Company incurred a net loss of $4,245,000 for
the three months ended September 30, 1998 compared to net income of $568,000
for the three months ended September 30, 1998.
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1997
Revenues decreased by $1,745,000, or 27.8%, to $4,533,000 for the nine months
ended September 30, 1998 compared to $6,278,000 for the nine months ended
September 30, 1997. This decrease is primarily attributable to revenues for the
three months ended September 30, 1998 being comprised entirely of direct sales
through the Company's developing direct distribution infrastructure compared to
the revenues for the comparable period of 1997 being comprised solely of one
large order from a single third party distributor.
Cost of goods sold decreased by $940,000, or 23.7%, to $3,022,000 for the nine
months ended September 30, 1998 compared to $3,962,000 for the nine months
ended September 30, 1997. As a percentage of net sales, cost of goods sold
represented 66.7% and 63.1% for the nine months ended September 30, 1998 and
1997, respectively.
<PAGE> 10
Selling, general and administrative expenses for the nine months ended
September 30, 1998 were $9,144,000, an increase of $7,129,000, or 353.8%,
compared to selling, general and administrative expenses of $2,015,000 for the
nine months ended September 30, 1997. The increase in selling, general and
administrative expenses was primarily the result of the hiring of additional
personnel in connection with the Company's ramping up of its direct marketing
and distribution capabilities, the establishment of support centers and the
leasing of additional manufacturing capacity in order to support the Company's
increased production.
The Company's research and development expenses decreased by $37,000 from
$251,000 during the nine months ended September 30, 1997 to $214,000 for the
nine months ended September 30, 1998. The decrease was primarily the result of
reduced basic and applied research during 1998.
The Company recognized interest income (expense), net of $(634,000) for the nine
months ended September 30, 1998, compared to interest income (expense), net of
$129,000 for the nine months ended September 30, 1997. The interest income for
the nine months ended September 30, 1997 was primarily due to the investment of
the proceeds from the Company's IPO in October 1996. The interest expense for
the nine months ended September 30, 1998 was primarily due to the interest
accrued on the Notes sold by the Company in the Private Placement in February
1998.
As a result of the foregoing, the Company incurred a net loss of $8,481,000 for
the nine months ended September 30, 1998 compared to net income of $179,000 for
the comparable period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998, the Company had working capital of $11,457,000 and cash
and cash equivalents of $8,567,000.
The Company's primary sources of working capital are the net proceeds from the
Company's Private Placement of Notes consummated in February 1998, its lease
financing arrangement with First Sierra and direct sales to customers. Since
its inception, the Company has financed its operations through a number of
stock and debt issuances and conversions.
In February 1998, the Company consummated the Private Placement of Notes
generating net proceeds approximately $15.7 million. Annual interest accrues on
the Notes at a rate of 8 1/4% and is payable semi-annually through the
Company's issuance of additional Notes during the first two years and
thereafter, at the election of the Company, either in cash or through the
issuance of additional Notes. The Notes are convertible by the holders thereof
into shares of Common Stock at a Conversion Price of $17.00 per share. The
Notes automatically convert into shares of Common Stock after February 23,
1999, if the closing price of the Common Stock, as reported on the Nasdaq
SmallCap Market, exceeds 175% of the Conversion Price for a period of twenty
consecutive trading days, including the twenty trading days immediately
preceding to February 23, 1999. The Company may redeem the Notes after
February, 2001, under certain circumstances. The Company has used and will
continue to use the proceeds of the Private Placement to expand manufacturing
operations, continue the development of its direct marketing and distribution
organization, and for working capital and general corporate purposes.
<PAGE> 11
In November 1997, the Company entered into an agreement with a third party
providing for the factoring of the Company's accounts receivable (the
"Factoring Agreement"). Pursuant to the Factoring Agreement, the Company
effectively assigned all eligible receivables due from First Recovery to the
third party for a period of six months. The Factoring Agreement was terminated
on August 13, 1998.
The Company's material financial commitments relate principally to its
obligations to make lease payments pursuant to certain real property and
equipment leases (currently approximately $137,000 per month), and installment
payments for manufacturing equipment (currently approximately $21,926 per
month). The Company anticipates that its material commitments will increase
significantly over the next 12 months in connection with the Company's
continued expansion and development of its direct marketing and distribution
capabilities.
In 1997, the Company developed a plan to address and resolve any and all
anticipated Year 2000 computer problems and will begin upgrading its computer
systems to be Year 2000 compliant in November 1998. The plan provides for such
upgrade efforts to be completed by the end of fiscal year 1998. The year 2000
issue is the result of computer programs being written using two digits rather
than four to define the applicable year. The total cost of the project is
estimated to be approximately $36,000 and is being funded through operating cash
flows. The Company will expense all costs associated with these system changes
as they are incurred. As of September 30, 1998, no amounts had been expensed.
Capital requirements relating to the implementation of the Company's business
plan have been and will continue to be significant. The Company believes that
its ability to generate cash from operations is dependent upon, among other
things, increased demand for its products and services and the successful
development and implementation of its direct marketing and distribution
capabilities. In order to reduce certain of the Company's up-front capital
requirements associated with manufacturing operations, as well as service center
and service fleet development, the Company leases and intends to continue to
lease rather than purchase, to the extent possible, equipment, facilities and
vehicles. The Company believes, based on currently proposed plans and
assumptions relating to its operations, that the proceeds from the Private
Placement and the Company's existing financing arrangements, together with cash
flow from operations, will be sufficient to satisfy the Company's cash
requirements for a period of at least 12 months. In the event that the Company's
plans change, its assumptions change or prove to be inaccurate or the proceeds
from the Private Placement or available financing arrangements and cash flows
from operations prove to be insufficient to fund the Company's rapid expansion
and development efforts, the Company would be required to seek additional
sources of financing. There can be no assurance that the Company will have
sufficient capital resources to permit the Company to continue implementation of
its business plan or that any additional financing will be available to the
Company on acceptable terms, or at all. If adequate financing is not available,
the Company's business operations could be materially adversely affected.
As indicated in the accompanying financial statements, as of September 30,
1998, the Company's accumulated deficit totaled $14,401,000.
The Company's cash and cash equivalents balance increased by $6,324,000 from
$2,243,000 as of December 31, 1997 to $8,567,000 as of September 30, 1998,
primarily due to the proceeds from the Private Placement. Since the Company
commenced the sale of its products, the Company has experienced negative cash
flow from its operating activities.
<PAGE> 12
CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS.
The foregoing Management's Discussion and Analysis contains various "forward
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning
future events, including, but not limited to, statements regarding growth in
sales of the Company's products and the sufficiency of the Company's cash flow
for its future liquidity and capital resource needs. These forward looking
statements are further qualified by important factors that could cause actual
events to differ materially from those in such forward looking statements.
These factors include, without limitation, increased competition, the
sufficiency of the Company's patents, the ability of the Company to manufacture
its systems on a cost effective basis, market acceptance of the Company's
products and the effects of governmental regulation. Results actually achieved
may differ materially from expected results included in these statements as a
result of these or other factors.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In October 1998, the Company's Board of Directors adopted a Common Stock
Purchase Rights Plan ("The Rights Plan") and declared a dividend distribution of
one Common Stock Purchase Right on each outstanding share of the Company's
Common Stock. The Rights are designed to ensure that all shareholders receive
fair and equal treatment in the event of any proposed takeover of the Company
and to guard against partial tender offers, squeeze-outs, open market
accumulations and other coercive or unfair tactics to gain control of the
Company which might provide inadequate value to shareholders. Each Right has an
initial exercise price of $75.23 for one share of the Company's Common Stock.
The Rights will be exercisable only if a person or group acquires 15% or more of
the Company's Common Stock (or 10% of such stock under certain circumstances) or
announces a tender offer, the consummation of which would result in ownership by
a person or group of 15% or more of the Common Stock (or 10% of such stock under
certain circumstances). Upon such occurrence, each Right (other than the Rights
owned by such person or group) will entitle the holder to purchase from the
Company the number of shares of the Common Stock having a market value equal to
twice the exercise price of the Right. If the Company is acquired in a merger or
other business combination transaction, or sells more than 50% of its assets or
earning power, after a person or group has acquired 15% or more of the Company's
outstanding Common Stock (or 10% of such stock under certain circumstances),
each Right (other than Rights owned by such person or group) will entitle its
holder to purchase, at the Right's then-current exercise price, a number of the
acquiring company's common shares having a market value of twice such price.
<PAGE> 13
Following the acquisition by a person or group of 15% or more of the Company's
Common Stock (or 10% of such stock under certain circumstances) and prior to an
acquisition of 50% or more of the Common Stock, the Company's Board of Directors
may exchange the Rights (other than Rights owned by such person or group) at an
exchange ratio of one share of Common Stock per Right.
Prior to the acquisition by a person or group of beneficial ownership of 15% or
more of the Company's Common Stock (or 10% of such stock under certain
circumstances), the Rights are redeemable for $.001 per Right at the option of
the Company's Board of Directors.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 1998 Annual Meeting of Shareholders on June 26, 1998. One
item was submitted to a vote of shareholders at that time: the election of five
members to the Company's Board of Directors to hold office until the Company's
1999 Annual Meeting of Shareholders or until their successors are duly elected
and qualified. Pierre G. Mansur, Paul I. Mansur, Dr. Jan Hedberg, and Joseph E.
Jack were re-elected as Directors of the Company and Ronald J. Korn was elected
to become a Director of the Company. In this regard, 4,058,073 votes were cast
in favor of the election of each of Pierre G. Mansur, Paul I. Mansur, Dr. Jan
Hedberg, Joseph E. Jack, and Ronald J. Korn and 800 votes were withheld for
voting for each such director nominee.
ITEM 5. OTHER INFORMATION.
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27.1 ... Financial Data Schedule (for SEC use only).
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mansur Industries Inc.
/s/ Paul I. Mansur
Date: November 14, 1998 ----------------------------------------
PAUL I. MANSUR
Chief Executive Officer
(Principal Executive Officer)
/s/ Richard P. Smith
Date: November 14, 1998 ----------------------------------------
RICHARD P. SMITH
Vice President of Finance
and Chief Financial Officer
(Principal Financial Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 8,567
<SECURITIES> 0
<RECEIVABLES> 1,384
<ALLOWANCES> 0
<INVENTORY> 3,325
<CURRENT-ASSETS> 13,635
<PP&E> 2,739
<DEPRECIATION> 371
<TOTAL-ASSETS> 17,344
<CURRENT-LIABILITIES> 2,178
<BONDS> 17,870
0
0
<COMMON> 5
<OTHER-SE> (3,285)
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</TABLE>
