ANALYTICAL SURVEYS INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 0-13111

ANALYTICAL SURVEYS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

COLORADO

84-0846389

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification Number)

11900 CROWNPOINT DRIVE, SAN ANTONIO, TEXAS 78233

(Address of principal executive offices)

(210) 657-1500

(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 PAST TWELVE (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 NINETY (90) DAYS. YES x NO ¨

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT). YES ¨ NO x

THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF FEBRUARY 1, 2005, WAS 2,869,272.

TABLE OF CONTENTS


		PAGE
PART 1.	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

PART 2.	OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Submissions of Matters to a Vote of Security Holders	24

Item 5.	Other Information	24

Item 6.	Exhibits and Reports on Form 8-K	24

SIGNATURES		25

EXHIBIT INDEX

Exhibit 31.1	Section 302 Certification of Chief Executive Officer

Exhibit 31.2	Section 302 Certification of Chief Accounting Officer

Exhibit 32.1	Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2	Section 906 of the Sarbanes-Oxley Act of 2002

Part I

Financial Information

Item 1. Financial Statements

ANALYTICAL SURVEYS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)


	December 31, 2004			September 30, 2004
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,636		$	867
Accounts receivable, net of allowance for doubtful accounts of $54 and $54 at December 31 and September 30, 2004, respectively		2,035			3,431
Revenue earned in excess of billings		2,629			3,006
Prepaid expenses and other		168			183

Total current assets		6,468			7,487

Equipment and leasehold improvements, at cost:
Equipment		4,788			4,783
Furniture and fixtures		484			484
Leasehold improvements		267			267

		5,539			5,534
Less accumulated depreciation and amortization		(5,330	)		(5,274	)

Net equipment and leasehold improvements		209			260

Total assets	$	6,677		$	7,747

Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt		33			53
Billings in excess of revenue earned		394			468
Accounts payable		499			882
Accrued interest – related party		—			78
Accrued liabilities		472			479
Accrued payroll and related benefits		573			678
Redeemable preferred stock – current portion		—			129
Fair value of derivative feature – related party		—			122

Total current liabilities		1,971			2,889

Long-term liabilities:
Long-term debt – related party		—			1,601
Redeemable preferred stock, no par value. Authorized 2,500 shares; 166 and 259 shares issued and outstanding at December 31 and September 30, 2004, (liquidation value $267 and $362), respectively		210			190

Total long-term liabilities		210			1,791

Total liabilities		2,181			4,680

Commitments and contingencies
Stockholders’ equity:
Common stock, no par value. Authorized 10,000 shares; 2,869 and 1,104 shares issued and outstanding at December 31 and September 30, 2004, respectively		35,330			33,410
Accumulated deficit		(30,834	)		(30,343	)

Total stockholders’ equity		4,496			3,067

Total liabilities and stockholders’ equity	$	6,677		$	7,747

See accompanying notes to consolidated financial statements.

ANALYTICAL SURVEYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended December 31
	2004			2003
Revenues	$	2,028		$	2,554

Costs and expenses:
Salaries, wages and benefits		1,554			1,809
Subcontractor costs		378			796
Other general and administrative		436			864
Depreciation and amortization		55			85
Severance and related costs		67			22

Total operating costs		2,490			3,576

Loss from operations		(462	)		(1,022	)

Other income (expense):
Interest expense, net		(41	)		(226	)
Other income, net		12			(53	)

Total other income (expense)		(29	)		(279	)

Loss before income taxes		(491	)		(1,301	)
Provision for income taxes		—			—

Net loss available to common shareholders	$	(491	)	$	(1,301	)

Basic net loss per common share available to common shareholders	$	(0.25	)	$	(1.33	)

Diluted net loss per common share available to common shareholders	$	(0.25	)	$	(1.33	)

Weighted average common shares:
Basic		1,976			980

Diluted		1,976			980

See accompanying notes to consolidated financial statements.

ANALYTICAL SURVEYS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the Three Months Ended December 31, 2004

(In thousands)

(Unaudited)


	Common Stock			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Accumulated Deficit			Total Stockholders’ Equity
Balances at September 30, 2004	1,104	$	33,410	$	(30,343	)	$	3,067
Net loss	—		—		(491	)		(491	)
Common stock issued pursuant to conversion of senior secured convertible note	1,701		1,806		—			1,806
Issuance of inducement stock options	—		22		—			22
Common stock issued pursuant to exercise of stock options	64		92		—			92

Balances at December 31, 2004	2,869	$	35,330	$	(30,834	)	$	4,496

See accompanying notes to consolidated financial statements.

ANALYTICAL SURVEYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended December 31
		2004			2003
Cash flows from operating activities:
Net loss		$	(491	)	$	(1,301	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			55			85
Issuance of inducement stock options			22			—
Accretion of interest expense on preferred stock			20			150
Accretion of interest expense on convertible debt – related party			9			29
Change in fair value of derivative instrument or carrying value of premium on convertible debt – related party			(12	)		53
Changes in operating assets and liabilities:
Accounts receivable, net			1,396			992
Revenue earned in excess of billings			377			399
Prepaid expenses and other			15			(142	)
Billings in excess of revenue earned			(75	)		100
Accounts payable and other accrued liabilities			(381	)		(135	)
Accrued payroll and related benefits			(105	)		(128	)

Net cash provided by operating activities			830			102

Cash flows from investing activities:
Purchase of equipment and leasehold improvements			(5	)		(3	)

Net cash used in investing activities			(5	)		(3	)

Cash flows from financing activities:
Principal payments on long-term debt			(19	)		(19	)
Redemption of preferred stock			(129	)		—
Proceeds from common stock issued pursuant to exercise of options			92			—

Net cash used in financing activities			(56	)		(19	)

Net increase in cash			769			80

Cash and cash equivalents at beginning of period			867			1,952

Cash and cash equivalents at end of period		$	1,636		$	2,032

Supplemental disclosures of cash flow information:
Cash paid for interest		$	1		$	2

Non-cash financing activities:	&nb

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