UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1996 Commission File Number 0-26590
COM/TECH COMMUNICATIONS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
New York 13-3146673
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
770 Lexington Avenue
New York, New York 10021
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(212) 826-2935
------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 12, 1996 was 3,710,000.
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
INDEX
- ------------------------------------------------------------------------------
Item 1. Financial Statements:
Balance Sheets as of June 30, 1996 [Unaudited]..................... 1.....2
Statements of Operations for the three months ended
June 30, 1996 and 1995 [Unaudited]................................. 3.....
Statements of Stockholders' Equity for the three months ended
June 30, 1996 [Unaudited].......................................... 4.....
Statements of Cash Flows for the three months ended
June 30, 1996 and 1995 [Unaudited]................................. 5.....
Notes to Financial Statements...................................... 6.....9
Item 2. Managements' Discussion and Analysis of the Financial Condition
and Results of Operations.....................................10.....12
Signature.............................................................13.....
. . . . . . . . . . . . . . . . . .
<PAGE>
<TABLE>
Item 1:
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
BALANCE SHEET AS OF JUNE 30, 1996.
[UNAUDITED]
- ------------------------------------------------------------------------------
<S> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 2,216,770
Accounts Receivable - [Net of Allowance of $14,167] 87,847
Loan Receivable - Officer 28,983
Related Party Receivable 750,000
Interest Receivable - Related Parties 28,592
Prepaid Expenses 46,863
Miscellaneous Receivable 14,891
Note Receivable 50,000
-----------
Total Current Assets 3,223,946
Equipment:
Equipment 1,228,862
Equipment Under Capitalized Leases 166,376
Furniture and Fixtures 38,364
Leasehold Improvements 95,239
-----------
Total - At Cost 1,528,841
Less: Accumulated Depreciation 1,182,264
Equipment - Net 346,577
-----------
Other Assets:
Loan Receivable - Officer 86,948
Deposits 38,080
Deferred Expense - Net 63,333
-----------
Total Other Assets 188,361
Total Assets $ 3,758,884
===========
See Notes to Financial Statements.
1
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<TABLE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
BALANCE SHEET AS OF JUNE 30, 1996.
[UNAUDITED]
- ------------------------------------------------------------------------------
<S> <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable $ 178,591
Current Portion of Capitalized Lease Obligations 40,174
Accrued Expenses 22,131
Accrued Taxes 38,342
Other Payables 7,350
-----------
Total Current Liabilities 286,588
Long-Term Liability:
Capitalized Lease Obligations 90,636
Total Liabilities 377,224
Commitments and Contingencies [5] --
Stockholders' Equity:
Common Stock, $.0001 Par Value, 25,000,000 Shares Authorized,
3,710,000 Shares Issued and Outstanding 371
Paid-in Capital 6,596,951
Retained Earnings [Deficit] (3,215,662)
Total Stockholders' Equity 3,381,660
Total Liabilities and Stockholders' Equity $ 3,758,884
===========
See Notes to Financial Statements.
</TABLE>
2
<PAGE>
<TABLE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
[UNAUDITED]
- ------------------------------------------------------------------------------
Three months ended
June 30,
1 9 9 6 1 9 9 5
------- -------
<S> <C> <C>
Revenues $ 254,280 $ 228,470
Cost of Revenues 163,903 91,499
---------- -----------
Gross Profit 90,377 136,971
---------- -----------
Operating Expenses:
Selling Expenses 47,399 3,249
Salaries, Payroll Taxes and Benefits 234,328 103,425
Compensation of Related Party 87,643 --
Consulting Fee 35,706 22,500
Depreciation and Amortization 22,927 37,275
Rent and Utilities 24,713 26,325
Other Operating Expenses 47,851 985
Bad Debt Expense 3,500 3,500
Professional Fees 22,546 6,950
Reimbursed Related Party Expenses 37,465 --
Compensation Expense - Issuance of Stock [6C] -- 330,000
Financing Costs [7] -- 528,000
---------- -----------
Total Operating Expenses 564,078 1,062,209
---------- -----------
[Loss] from Operations (473,701) (925,238)
---------- -----------
Other Income [Expense]:
Interest Expense (3,494) (3,732)
Interest Income 53,618 3,444
Miscellaneous Income 713 --
---------- -----------
Total Other Income [Expense] 50,837 (288)
---------- -----------
Net [Loss] $ (422,864) $ (925,526)
========== ===========
Net [Loss] Per Share $ (.11) $ (.36)
========== ===========
Average Number of Shares Outstanding 3,710,000 2,560,000
========== ===========
See Notes to Financial Statements.
3
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<TABLE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
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STATEMENT OF STOCKHOLDERS' EQUITY
[UNAUDITED]
- ------------------------------------------------------------------------------
Retained Total
Common Stock Paid-in Earnings Stockholders'
Shares Amount Capital [Deficit] Equity
<S> <C> <C> <C> <C> <C>
Balance - April 1, 1996 3,710,000 $ 371 $6,596,951 $(2,792,798$3,804,524
Net [Loss] -- -- -- (422,864) (422,864)
--------- ---------- --------- ---------- ----------
Balance - June 30, 1996 3,710,000 $ 371 $6,596,951 $(3,215,662$3,381,660
========= ========== ========== =====================
See Notes to Financial Statements.
</TABLE>
4
<PAGE>
<TABLE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
[UNAUDITED]
- ------------------------------------------------------------------------------
Three months ended
June 30,
1 9 9 6 1 9 9 5
------- -------
<S> <C> <C>
Net Cash - Operating Activities $ (464,185) $ 8,616
---------- -----------
Investing Activities:
Purchases of Equipment (26,467) --
Note Receivable (50,000) --
Loan Advances to Related Party (485,000) --
Repayment of Loan Advances to Officer 28,983 --
---------- -----------
Net Cash - Investing Activities (532,484) --
---------- -----------
Financing Activities:
Capital Lease Payments (8,275) (4,686)
Deferred Offering Costs -- (102,234)
Bridge Loan Proceeds -- 400,000
---------- -----------
Net Cash - Financing Activities (8,275) 293,080
---------- -----------
Net [Decrease] Increase in Cash and Cash Equivalents (1,004,944) 301,696
Cash and Cash Equivalents - Beginning of Periods 3,221,714 54,609
---------- -----------
Cash and Cash Equivalents - End of Periods $2,216,770 $ 356,305
========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ 3,494 $ 1,549
State and Federal Income Taxes $ -- $ --
See Notes to Financial Statements.
</TABLE>
5
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
[UNAUDITED]
- ------------------------------------------------------------------------------
[1] Organization and Business
The Company's business operations consist of production of video and
teleconferencing multi-media services from two locations in the New York
metropolitan area. Com/Tech Communication Technologies, Inc. was incorporated in
the State of New York on July 19, 1982 under the name A.C.T. Advanced
Communication Technologies, Inc. On July 20, 1982, the Certificate of
Incorporation was amended changing the name of the Company to Com/Tech
Communication Technologies, Inc.
[2] Summary of Significant Accounting Policies
[A] Cash and Cash Equivalents - Cash equivalents are comprised of certain highly
liquid investments with a maturity of three months or less when purchased.
[B] Cash Concentration - The Company currently has funds invested in financial
instruments in the amount of approximately $1,900,000 that are subject to credit
risk beyond the insured amounts.
[C] Concentration of Credit Risk - The Company routinely assesses the financial
strength of its customers and based upon factors surrounding the credit risk of
its customers believes, that after providing an allowance for bad debts, its
accounts receivable credit risk is limited.
[D] Equipment - Equipment, furniture and fixtures, and leasehold improvements
are stated at cost. Expenditures for maintenance, repairs and minor renewals are
expensed as incurred. When assets are retired, or otherwise disposed of, the
related cost and accumulated depreciation are removed from their respective
accounts and any profit or loss on such disposition is included in operations.
[E] Depreciation and Amortization - Depreciation is calculated on the
straight-line and declining balance methods to amortize the cost of various
classes of depreciable assets over their estimated useful lives, which is five
years for all classes. During fiscal 1996, the Company reduced its estimate of
the useful lives of its production equipment from ten to five years.
Amortization of leasehold improvements is calculated on the straight-line method
over the life of the lease.
[F] Deferred Expense -At the close of the public offering, the Company made a
$100,000 payment to the underwriter for future financial services. Amortization
is calculated on the straight-line method over the life of the agreement which
is five years. Amortization expense as of June 30, 1996 was approximately
$16,700.
[G] Basis of Reporting - The accompanying unaudited 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, such statements include all
adjustments [consisting only of normal recurring items] which are considered
necessary to make the interim financial statements not misleading. It is
suggested that these financial statements be read in conjunction with the
financial statements and notes for the year ended March 31, 1996 included in the
Com/Tech Communication Technologies, Inc. Form 10-KSB.
[H] Stock Options and Similar Equity Instruments Issued to Employees - The
Company uses the intrinsic value method to recognize compensation expense in
accordance with Accounting Principles Board ["APB"] Opinion No. 25, "Accounting
for Stock Issued to Employees." Under APB Opinion No. 25, compensation expense
for stock based compensation is computed as the excess of the market price of
the stock over the option price on the measurement date.
[I] Revenue Recognition - The Company's policy is to record revenue when
services are performed.
6
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
- ------------------------------------------------------------------------------
[2] Summary of Significant Accounting Policies [Continued]
[J] Net [Loss] Per Share - Net [loss] per share was calculated based on the
weighted average number of shares outstanding during the periods presented.
Common share equivalents are included when dilutive.
[K] Reclassification - Certain prior year items have been reclassified to
conform with the current year's presentation.
[L] Business Concentrations - For the three months ended June 30, 1996, the
Company had net sales to two customers, that derived approximately 33% and 15%
of net sales. For the three months ended June 30, 1995, two different customers
derived approximately 33% and 22% of net sales.
[3] Related Party Transactions
[A] Loan Receivable Officer - The loan receivable was a demand loan with
interest at 9% per annum to the President of the Company. On March 31, 1995, the
balance of $144,914 was converted to an installment loan with a five-year term
and interest of 9% per annum. In June of 1996, the Company agreed to convert a
receivable including interest totaling approximately $43,000 from the officer as
a salary distribution for 1996.
[B] Related Party Receivable - The Company in exchange for demand notes advanced
a total of $750,000 through June 30, 1996 to a partnership of which the
Company's chairman has an interest. The demand notes accrue interest quarterly
at a rate of 2% above prime. On July 11, 1996, $265,000 and on August 9, 1996,
$80,000 plus interest computed to June 30, 1996 was repaid by the partnership.
[C] Reimbursed Related Party - The following schedule represents expenses which
were reimbursed to a partnership, of which the Chairman has an interest, during
the three months ended June 30, 1996 and 1995:
June 30,
1 9 9 6 1 9 9 5
Selling Expense $ 8,857 $ --
Consulting 969 --
Rent 19,248 --
Other Expenses 8,391 --
---------- ----------
Totals $ 37,465 $ --
------ ========== ==========
7
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #3
[UNAUDITED]
- ------------------------------------------------------------------------------
[4] Capital Lease Obligation
Capital Lease Obligation - The Company is the lessee of certain video production
equipment under capital leases entered into and expiring in various years
through the year 2001. The assets and liabilities under capital lease are
recorded at the lower of the present value of the minimum lease payments or the
fair value of the asset. The leased assets are amortized over the related lease
terms. Property held under capital leases included in equipment is $166,376.
Amortization of assets under capital leases is included in depreciation expense
and amounted to approximately $7,200 for the three months ended June 30, 1996.
Minimum future lease payments under capital leases as of June 30, 1996, for each
of the next five years and in the aggregate are:
Twelve months
ending
June 30,
1997 $ 52,655
1998 39,824
1999 26,994
2000 24,575
2001 13,100
Thereafter --
-----------
Total 157,148
Less: Amount Representing Interest 26,338
Present Value of Minimum Lease Payment 130,810
Less: Current Portion 40,174
Total $ 90,636
----- ===========
Interest rates on capitalized leases vary from 8% to 18% and are imputed based
on the lower of the Company's incremental borrowing rate at the inception of
each lease or the lessor's implicit rate of return.
In July 1996, the Company entered into capital leases for video production
equipment. Minimum future lease payments under this lease aggregate
approximately $1,691 per month and expires in 2001.
[5] Operating Lease Commitments and Contingencies
Lease - The Company leases its premises under a seven year operating lease,
expiring January 31, 2001. In addition to the minimum rentals, the Company is
also required to pay its share of insurance, utilities and any escalation in
real estate taxes.
Minimum lease obligations are approximately as follows:
Twelve months
ending
March 31,
1997 $ 105,300
1998 105,300
1999 105,300
2000 105,300
2001 61,425
Thereafter --
-----------
Total $ 482,625
----- ===========
Rent expense amounted to $21,675 and $23,287 for the three months ended June 30,
1996 and 1995, respectively.
8
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #4
[UNAUDITED]
- ------------------------------------------------------------------------------
[6] Equity
[A] Amendment to Certificate of Incorporation - On May 11, 1995, the Company
amended its certificate of incorporation to increase the number of authorized
shares of common stock from 200 to 25,000,000 and change the par value from no
par value to $.0001 par value. In addition, the Company authorized 1,000,000
shares of preferred stock.
[B] Stock Split - On May 12, 1995, the Company effected a 10,000 for 1 stock
split of the outstanding shares of common stock of the Company by changing the
200 then outstanding shares of common stock, no par value, into 2,000,000 shares
of common stock of the Company, with $.0001 par value. All share data has been
adjusted to reflect this change.
[C] Equity Transaction - On May 17, 1995, 100,000 shares of the Company's common
stock were issued to employees of the Company. A compensation expense of
approximately $330,000 was incurred in the June 1995 quarter as a result of the
issuance of these shares.
[D] Public Offering - The Company filed a registration statement of 1,000,000
units at $5.00 per unit, which was declared effective in August of 1995. Each
unit consisted of one share of common stock. The Company successfully closed
this public offering with an over allotment of 150,000 units exercised and
received net proceeds of $4,549,988 on August 23, 1995. Bridge notes of $409,293
including accrued interest, underwriting costs of $690,719 and a prepaid
consulting fee of $100,000 were paid at the closing.
[E] Stock Option Plan - The Option Plan provides for issuance of incentive stock
options and non-qualified stock options to key employees. 300,199 options to
purchase restricted shares of common stock, are exercisable at $3.30 per share
until December 31, 1999 and 3,500 options to purchase restricted shares of
common stock are exercisable at $3.75 per share until March 31, 1999, for a
total of 303,699 options outstanding.
On April 22, 1996, the Company granted options to the president of the Company
to purchase 150,000 shares of restricted common stock for $3.00 per share,
which approximates fair market value. The options are exercisable for a
three year period.
[7] Bridge Note Payable
On May 15, 1995, the Company received bridge loans for $400,000 at 8% interest
per annum which were payable May 31, 1996 or upon the successful completion of a
proposed public offering, whichever was earlier. The bridge loans had 400,000
units as additional consideration, with each unit having one share of the
Company's common stock and one Class A warrant. The 400,000 units represent a
financing cost of approximately $1,320,000, the fair value of the units, which
was expensed during the year ended March 31, 1996 based upon a repayment of the
bridge loans in September of 1995.
[8] Acquisitions
[A] Note Receivable - On April 5, 1996, the Company entered into a letter of
intent which is subject to FCC approval to acquire a Company which provides
telecommunication services to governmental clientele. In connection with this
acquisition, the Company advanced $50,000 to this entity, which is evidenced by
a secured note. FCC approval is pending.
[B] Letter of Intent - On June 6, 1996, the Company entered into a letter of
intent to acquire a developer of microprocessor-controlled electronic systems.
. . . . . . . . . . . . . . . . .
9
<PAGE>
Item 2:
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Overview
The Company initiated operations on July 19, 1982. It has been deriving a
significant amount of its revenues from the provision of video technology
services in several areas of business:
o Private Networks: The Company designs, produces and manages distance learning
and informational video programs for the medical, financial and insurance
communities. Distance learning is sometimes referred to as "the electronic
classrooms" and involves the transmission of educational curriculum material
between a central studio site and multiple classroom sites at locations
around the country. Often these programs offer interactive communications so
that the students can ask questions and otherwise interact with the
instructors.
o Satellite Press Tours: The Company produces and transmits live "satellite
press tours" through which media personalities may be interviewed by talk
show hosts on TV programs around the county with all of the interviews
emanating from the Company's New York studio.
o Multi-Media Production: Com/Tech provides the facilities and the technical
expertise to convert standard linear television programs to interactive
television, distance learning curricula, and site- specific
computer-controlled entertainment and advertising programming.
The Company currently maintains a video production and editing studio with
satellite transmission facilities in New York City.
The Company is in the process of expanding its business opportunities in several
areas with the proceeds of its public offering. In January 1996, the Company
announced the formation of the NorthStar Distance Learning Division, to
spearhead the Company's current and future distance learning programs. One of
its first efforts was the conclusion of a multi-year agreement with the New York
Society of Securities Analysts for the joint development and delivery through
distance learning technology, of courseware to candidates studying for the CFA
[Certified Financial Analyst] examination.
The Company has also been pursuing the acquisition of companies which offer the
potential to enhance strategic goals and shareholder value. The increased focus
on acquisition will provide an opportunity to build the Company's operating base
faster than through internal growth alone. To this end, the Company announced in
April 1996, that it had entered into a letter of intent to acquire Wireless Data
Systems, Inc. ["WDS"] of Washington, D.C., subject to further negotiation and
FCC approval, and to the satisfactory conclusion of the due diligence process
and Board approval. WDS owns facilities in downtown Washington which provide
video production services, satellite transmission, and fiberoptic lines which
offer strategic links to key government clients. WDS also owns an FCC
construction permit for a low powered television station to be located in
Baltimore, MD, and has applied for a permit to move it to Washington. The
complementary capabilities and resources of Com/Tech and WDS offer substantial
opportunities for enhancing current business and developing new business in the
communications technology field. Negotiations to complete the acquisition are
continuing.
The Company has also entered into a letter of intent to acquire Triangle
MicroSystems, Inc. ["TMS"], a privately-held company, located in Raleigh, North
Carolina, which designs and develops electronic- based control instrumentation
and data transfer systems. The acquisition is subject to further negotiation,
and to the satisfactory conclusion of the due diligence process and Board
approval. Triangle MicroSystems, incorporated in 1979, is a developer of
microprocessor-controlled electronic systems for the control and transfer of
both digital and analog data. TMS has developed systems for use in various
industries including microprocessor-based electronic gasoline pump controllers;
point of sale/credit authorization control systems; and state-of-the-art
building environmental controls and automation systems ["smart buildings"].
10
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Overview [Continued]
Management believes that the merging of TMS' electronic design and development
capabilities with the Company's extensive communications expertise will
effectively link the converging worlds of data transfer and communications to
facilitate the movement of digital information for both video and control
systems. The combined resources will yield substantial opportunities for the
development of new business opportunities, while the strong revenue and
profitability base of TMS will enhance Com/Tech's pursuit of its own strategic
goals. Negotiations are proceeding to complete the acquisition.
On April 27, 1996, the Board of Directors appointed Eugene L. Lewis, the
Company's Chief Operating Officer, to serve as Director and President,
succeeding Peter Wild, who resigned. Mr. Lewis has extensive experience in
corporate management and capital project development in both the public and
private sectors. As Director of Planning for several major engineering
consulting firms, he managed the design and construction of large capital
projects. He also held executive positions in corporate administration,
including Director of Administration at Citizens Utilities Company, an
investor-owned utility. In the public sector, Mr. Lewis served as Manager,
Program Development for the Port Authority of New York and New Jersey, where his
responsibilities included planning and developing information systems for the
Port Authority Bus Terminal. In addition to advancing the Company's new business
opportunities, Mr. Lewis will focus on improving operating efficiency of current
operations and developing capital programs associated with acquisitions such as
Wireless Data Systems and Triangle MicroSystems.
Three month ended June 30, 1996 compared to the three months ended June 30, 1995
Results of Operations
Revenues for the three months ended June 30, 1996 and 1995 were approximately
$254,000 and $228,000, respectively. The increase in revenues is approximately
$26,000.
The gross profit for the three months ended June 30, 1996 was $90,377 or 36% as
compared to $136,971 or 60% for the three months ended June 30, 1995,
respectively. This decrease in gross profit was caused by additional costs
incurred in connection with the use of outside facilities for remote productions
and the hiring of a full-time production engineer in August of 1995. In
addition, the cost of transmission services increased for the industry as a
whole. The Company was unable to pass along this incremental increase to its
customers.
Operating expenses for the three months ended June 30, 1996 and 1995 was
$564,078 and $1,062,209, respectively, a decrease of $498,131. This decrease is
attributable to a non-cash expense of $330,000 in connection with the issuance
of common stock to employees and financing costs of approximately $528,000 that
was incurred in conjunction with the Bridge Loans received in May of 1995. This
decrease was offset by increases in salaries, payroll taxes and benefits of
approximately $219,000, legal and professional fees of approximately $16,000,
other operating and administrative expenses of approximately $84,000 and
consulting fees of approximately $13,000. These additional expenses were
incurred in connection with the Company transforming itself from a privately
held corporation to a publicly held entity and the cost incurred with pursing
potential acquisitions.
Selling expense increased approximately $44,000. This increase was attributable
to the Company pursuing new business opportunities for the Company's existing
business.
11
<PAGE>
COM/TECH COMMUNICATION TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Three month ended June 30, 1996 compared to the three months ended June 30, 1995
Results of Operations [Continued]
Interest expense for the three months ended June 30, 1996 and 1995 was $3,494
and $3,732, respectively.
Liquidity and Capital Resources
At June 30, 1996, the Company had working capital of $2,937,358 and cash and
cash equivalents of $2,216,770. The Company utilized $464,185 from operations
for the three months ended June 30, 1996 as compared to providing $8,616 from
operations in 1995. The Company used $532,484 and $-0- in investing activities
for the three months ended June 30, 1996 and 1995, respectively. The Company
utilized $8,275 from financing activities in the three months ended June 30,
1996 as compared to generating $293,080 in the corresponding prior period which
included bridge loan proceeds of $400,000.
The Company has stockholders' equity of $3,381,660 as of June 30, 1996. Should
the Company require additional equity funding, it must first obtain prior
written consent from the underwriter of the public offering. This restriction is
for a period of 24 months after the effective date of the registration
statement, which occurred on August 23, 1995. Consequently, the Company could be
restricted by this underwriting agreement from meeting its liquidity needs.
However, the Company is not prohibited from securing bank financing.
Impact of Inflation
The Company does not believe that inflation has had a material adverse effect on
sales or income during the past periods. Increase in supplies or other operating
costs could adversely affect the Company's operations; however, the Company
believes it could increase prices to offset increases in costs of goods sold or
other operating costs.
12
<PAGE>
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.
Com/Tech Communication Technologies, Inc.
Date: _________________ By:/s/ Nancy Shalek
Nancy Shalek, Chairman of the Board,
Chief Financial Officer
13
<PAGE>
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.
Com/Tech Communication Technologies, Inc.
Date: 08/14/96
________ By:
Nancy Shalek, Chairman of the Board,
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
this schedule contains financial information extracted from the
consolidated statements of operations and balance sheet and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> mar-31-1996
<PERIOD-END> jun-30-1996
<CASH> 2,216,770
<SECURITIES> 0
<RECEIVABLES> 87,847
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,223,946
<PP&E> 1,528,841
<DEPRECIATION> 1,182,264
<TOTAL-ASSETS> 3,758,884
<CURRENT-LIABILITIES> 286,588
<BONDS> 0
0
0
<COMMON> 371
<OTHER-SE> 3,381,289
<TOTAL-LIABILITY-AND-EQUITY> 3,758,884
<SALES> 254,280
<TOTAL-REVENUES> 254,280
<CGS> 163,903
<TOTAL-COSTS> 564,078
<OTHER-EXPENSES> (54,331)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,494
<INCOME-PRETAX> (422,864)
<INCOME-TAX> 0
<INCOME-CONTINUING> (422,864)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (422,864)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
