Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number 1-10927
SIMTROL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 84-1104448 | |
| (State of incorporation) |
(I.R.S. Employer Identification No.) |
|
| 5801 Goshen Springs Road Norcross, Georgia |
30071 |
|
| (Address of principal executive offices) | (Zip Code) |
(770) 242-7566
(Registrant’s telephone number, including area code)
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, 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 the latest practicable date.
| Outstanding at | ||||
| Class of Securities | July 31, 2002 | |||
Common Stock, $.001 Par Value |
16,869,454 | |||
SIMTROL, INC. AND SUBSIDIARIES
Form 10-Q
Quarter Ended June 30, 2002
Index
| Page | |||||||||
PART I. |
FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements: | ||||||||
| Consolidated
Balance Sheets as of June 30, 2002 and December 31, 2001 |
3 | ||||||||
| Consolidated
Statements of Operations for the Three and Six Months Ended June 30, 2002 and 2001 |
4 | ||||||||
| Consolidated
Statements of Cash Flows for the Six Months Ended June 30, 2002 and 2001 |
5 | ||||||||
| Consolidated
Statement of Stockholders’ Deficit for the Six Months Ended June 30, 2002 |
6 | ||||||||
| Notes to Consolidated Financial Statements | 7 | ||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 10 | |||||||
| Item 3. | Qualitative and Quantitative Disclosures About Market Risk | 15 | |||||||
PART II. |
OTHER INFORMATION | ||||||||
| Item 1. | Legal Proceedings | 15 | |||||||
| Item 4. | Submission of Items to a Vote of Security Holders | 15 | |||||||
| Item 6. | Exhibits and Reports on Form 8-K | 15 | |||||||
2
SIMTROL, INC.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SIMTROL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, 2002 AND DECEMBER 31, 2001
| June 30, | December 31, | |||||||||||
| 2002 | 2001 | |||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 145,641 | $ | 72,764 | ||||||||
Accounts receivable, net |
251,015 | 375,347 | ||||||||||
Inventories, net |
411,322 | 395,012 | ||||||||||
Prepaid expenses and other assets |
86,357 | 11,591 | ||||||||||
Total current assets |
894,335 | 854,714 | ||||||||||
Property and equipment, net |
152,198 | 206,400 | ||||||||||
Other assets: |
||||||||||||
Software development costs, net |
485,842 | 624,655 | ||||||||||
Investments |
— | 10,853 | ||||||||||
Other long term assets |
14,614 | 14,614 | ||||||||||
Total |
$ | 1,546,989 | $ | 1,711,236 | ||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||||||
Current Liabilities: |
||||||||||||
Current portion of capital lease and short-term borrowings |
$ | 38,453 | $ | 38,453 | ||||||||
Convertible debt |
1,036,714 | 293,290 | ||||||||||
Current liabilities of discontinued operations |
— | 84,350 | ||||||||||
Accounts payable and checks outstanding |
1,121,015 | 1,042,995 | ||||||||||
Accrued expenses |
340,871 | 360,659 | ||||||||||
Deferred revenues |
428,712 | 625,583 | ||||||||||
Total Current Liabilities |
2,965,765 | 2,445,330 | ||||||||||
Commitments and contingencies |
— | — | ||||||||||
Capital lease, less current portion |
10,569 | 29,462 | ||||||||||
Stockholders’ deficit: |
||||||||||||
Common stock, authorized 40,000,000 shares of
$.001 par value; issued and outstanding, 16,644,454 at
June 30, 2002 and 15,238,703 at December 31, 2001 |
16,645 | 15,239 | ||||||||||
Additional paid-in capital |
57,468,457 | 56,937,425 | ||||||||||
Accumulated deficit |
(58,914,447 | ) | (57,716,220 | ) | ||||||||
Total stockholders’ deficit |
(1,429,345 | ) | (763,556 | ) | ||||||||
Total |
$ | 1,546,989 | $ | 1,711,236 | ||||||||
See notes to consolidated financial statements.
3
SIMTROL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30 | June 30 | |||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||||
Revenues |
$ | 374,498 | $ | 549,062 | $ | 760,048 | $ | 984,351 | ||||||||||||
Cost of revenues |
242,375 | 424,683 | 486,915 | 639,146 | ||||||||||||||||
Gross profit |
132,123 | 124,379 | 273,133 | 345,205 | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||
Selling, general, and administrative |
531,912 | 824,290 | 1,072,900 | 1,497,946 | ||||||||||||||||
Research and development |
130,838 | 346,795 | 269,594 | 442,400 | ||||||||||||||||
Total operating expenses |
662,750 | 1,171,085 | 1,342,494 | 1,940,346 | ||||||||||||||||
Loss from operations |
(530,627 | ) | (1,046,706 | ) | (1,069,358 | ) | (1,595,141 | ) | ||||||||||||
Interest and other income/(expense), net |
(118,114 | ) | (29,675 | ) | (277,784 | ) | 7,354 | |||||||||||||
Loss before income taxes |
(648,741 | ) | (1,076,381 | ) | (1,347,142 | ) | (1,587,787 | ) | ||||||||||||
Income tax expense |
— | — | — | — | ||||||||||||||||
Loss before extraordinary item |
(648,741 | ) | (1,076,381 | ) | (1,347,142 | ) | (1,587,787 | ) | ||||||||||||
Extraordinary gain from extinguishment of debt, net of tax |
148,915 | — | 148,915 | — | ||||||||||||||||
Net loss |
$ | (499,826 | ) | $ | (1,076,381 | ) | $ | (1,198,227 | ) | $ | (1,587,787 | ) | ||||||||
Net loss per common share, Basic and Diluted: |
||||||||||||||||||||
Loss before extraordinary item |
$ | (0.04 | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.10 | ) | ||||||||
Extraordinary gain |
0.01 | — | 0.01 | — | ||||||||||||||||
Net loss per share |
$ | (0.03 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.10 | ) | ||||||||
Weighted shares outstanding |
||||||||||||||||||||
Basic and diluted |
15,369,970 | 15,231,360 | 15,306,337 | 15,205,410 | ||||||||||||||||
See notes to consolidated financial statements.
4
SIMTROL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2002 | 2001 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||||||
Net loss |
$ | (1,198,227 | ) | $ | (1,587,787 | ) | |||||
Adjustments to reconcile net loss to net cash
used by operating activities: |
|||||||||||
Loss in decline of market value of investments |
10,853 | — | |||||||||
Depreciation and amortization |
402,785 | 151,849 | |||||||||
Debt extinguishment |
(148,915 | ) | — | ||||||||
Changes in operating assets and liabilities: |
|||||||||||
Accounts receivable |
124,332 | 309,271 | |||||||||
Inventories |
(16,310 | ) | 33,220 | ||||||||
Prepaid expenses and other assets |
13,488 | (27,548 | ) | ||||||||
Accounts payable |
142,585 | 106,722 | |||||||||
Accrued expenses |
(19,788 | ) | (19,830 | ) | |||||||
Deferred revenues |
(196,871 | ) | 64,897 | ||||||||
Net cash used in operating activities |
(886,068 | ) | (969,206 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||||||
Purchases of property and equipment |
— | (3,505 | ) | ||||||||
Change in other assets |
— | (122,592 | ) | ||||||||
Net cash provided by (used in) investing activities |
— | (126,097 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||||||
Net (payments) proceeds on notes payable
and short-term credit facilities |
(18,893 | ) | (36,271 | ) | |||||||
Proceeds from exercise of stock options |
2,438 | 21,081 | |||||||||
Proceeds from convertible debt |
750,000 | — | |||||||||
Net proceeds from stock issuance |
225,400 | — | |||||||||
Net cash provided (used) by financing activities |
958,945 | (15,190 | ) | ||||||||
Increase (decrease) in cash and cash equivalents |
72,877 | (1,110,493 | ) | ||||||||
Cash provided by acquired operations |
— | 26,258 | |||||||||
Cash and cash equivalents at beginning of the period |
72,764 | 1,779,548 | |||||||||
Cash and cash equivalents at end of the period |
$ | 145,641 | $ | 695,313 | |||||||
Supplemental schedule of non-cash investing and financing activities: |
|||||||||||
Issuance of stock warrants |
$ | 239,607 | $ | 0 | |||||||
Beneficial conversion feature of convertible debt |
$ | 64,993 | $ | 0 | |||||||
See notes to consolidated financial statements.
5
SIMTROL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2002
| Common Stock | ||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||
| Number of | Paid in | Accumulated | Comprehensive | |||||||||||||||||||||
| Shares | Par Value | Capital | Deficit | Income | Total | |||||||||||||||||||
Balance December 31, 2001 |
15,238,703 | $ | 15,239 | $ | 56,937,425 | $ | (57,716,220 | ) | $ | — | $ | (763,556 | ) | |||||||||||
Net loss for the period |
(1,198,227 | ) | (1,198,227 | ) | ||||||||||||||||||||
Comprehensive income (loss) |
(1,198,227 | ) | — | (1,198,227 | ) | |||||||||||||||||||