U.S. 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 December 31, 1996
_________________________________________
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended to
Commission File Number: 0-3344
______________
ASTROSYSTEMS, INC.
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 13-5691210
_______________________________________________ __________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1220 Market St., Ste. 603, Wilmington, Delaware 19801
_______________________________________________ ___________________
(Address of principal executive offices) (Zip Code)
(302) 652-3115
___________________________________________________
(Registrant's telephone number, including area code)
N/A
_______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act 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 No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports
required to be filed by Sections 12, 13 or 15 (d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: December 31, 1996
- - 5,234,785
ASTROSYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I - FINANCIAL INFORMATION
Item 1. Statement of Net Assets in Liquidation 4
December 31, 1996
Statement of Changes in Net Assets in Liquidation 5
Six Months Ended December 31, 1996
Item 2. Management's Discussion and Analysis or
Plan of Operation 6
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
PART I - FINANCIAL INFORMATION
ASTROSYSTEMS, INC. AND SUBSIDIARIES
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to a fair
presentation for the period being reported. Additionally, it should be
noted that the accompanying condensed financial statements do not
purport to be complete disclosures in conformity with generally
accepted accounting principles.
On February 2, 1996, the Stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution (the "Plan"). Therefore,
the financial statements are presented in accordance with the
liquidation basis of accounting. These condensed financial statements
should be read in conjunction with the Registrant's financial
statements for the year ended June 30, 1996.
PAGE 3
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF NET ASSETS IN LIQUIDATION
(amounts in thousands, except per share amounts)
(Unaudited)
December 31,
1996
____________
Assets
______
Cash and cash equivalents (1) $29,886
U.S. government securities 9,925
Other assets (2) 5,042
_______
$44,853
Liabilities
___________
Accrued expenses/contingency reserve (3) 10,436
_______
Net assets in liquidation $34,417
=======
Number of common shares (4) 5,954
Net assets in liquidation per share (4) $6.22
=====
(1) Includes $1,000,000 held in an escrow account pursuant to an
asset purchase agreement.
(2) Assumes no material value for the Company's holdings in
AstroPower, Inc.
(3) The Company believes that the Accrued expenses/contingency
reserve will be adequate for payment of all expenses and other
known liabilities and foreseeable contingent obligations, as well
as an amount estimated to be required to carry out the Plan.
Existing liabilities at December 31, 1996:
Accounts payable, accrued expenses and
miscellaneous $1,535
Deferred income taxes 6,412
Minimum payments on nonrecourse obligation 139
Shut down costs and estimated operating costs
(including compensation) to administer the
Plan through dissolution 2,913
Estimated interest income (1,075)
Estimated tax benefit of losses through
dissolution (788)
Reserve for other contingencies 1,300
_______
$10,436
=======
In the event that the Accrued expenses/contingency reserve account
is not adequate for payment of the Company's expenses and
liabilities, each stockholder could be held liable for pro rata
payments to creditors in an amount not to exceed the stockholder's
prior distributions from the Company.
(4) Assumes the exercise of all dilutive stock options (718,765
options at an average exercise price of $3.04 per share). Net
assets in liquidation per share includes the effect of these
options as shown below:
Number of common shares 5,954
=======
Net assets in liquidation $34,417
Proceeds from the exercise of dilutive stock options 2,056
Estimated tax benefit of compensatory stock options 573
_______
Adjusted net assets in liquidation $37,046
Net assets in liquidation per share $6.22
=====
PAGE 4
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(in thousands)
(Unaudited)
Six Month
Period Ended
December 31, 1996
_________________
Net assets in liquidation at June 30, 1996 $33,586
Changes in estimated liquidation values of
assets and liabilities (1) 831
_______
Net assets in liquidation at December 31, 1996 $34,417
=======
Note (1) Includes adjustment in estimated liquidation value of certain
assets and liabilities:
Cash and securities $131
Accounts receivable (78)
Other assets 436
Accounts payable (151)
Shut down costs 1,135
Deferred income tax 206
Estimated tax benefit of loss through
dissolution (752)
Minimum payments on non-recourse obligation 11
Estimated interest income (106)
_____
Changes in estimated liquidation value $ 831
=====
PAGE 5
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
_________________________________________________________
Liquidity, Capital Resources and Impact of Inflation
____________________________________________________
The Board of Directors adopted, and the stockholders approved on
February 2, 1996, a Plan of Complete Liquidation and Dissolution (the
"Plan") of the Company. See "Plan of Complete Liquidation and
Dissolution" below.
The Board of Directors of the Company has authorized the
repurchase of up to 1,000,000 shares of Common Stock to be made from
time to time through open market and privately negotiated transactions.
To date, 552,527 shares have been repurchased.
The repurchase authorization remains in force and the Company
will, from time to time, repurchase shares when it is consistent with
maximizing shareholder distributions under the Plan.
Statement of Net Assets in Liquidation
______________________________________
Pursuant to the Plan, the Company consummated the sales of the
assets of its three operating units (Military Division, Behlman
Electronics subsidiary and Industrial Automation Division) as of
February 7, 1996. The exact amount of the proceeds to the Company of
such sales is dependent upon a final fixed asset and inventory
valuation. In connection with the sale of the Military and Behlman
operations, $1,000,000 of the purchase price was deposited into escrow
to provide for indemnification claims that the buyer may assert against
the Company or Behlman under the sale agreement. To date, the buyer
has made claims against the escrow in the approximate aggregate amount
of $764,000. The remainder of the escrow amount has been released to
the Company. The Company intends to defend against the buyer's claims
vigorously.
The Company has set aside, as Accrued expenses/contingency reserve,
an amount believed to be adequate for payment of all expenses and other
known liabilities and foreseeable contingent obligations, including
potential tax obligations. Any portion of the contingency reserve
which the Company determines is no longer required will be made
available for distribution to its shareholders. In the event that the
Accrued expenses/contingency reserve account is not adequate for
payment of the Company's expenses and liabilities, each stockholder
could be held liable for pro rata payments to creditors in an amount
not to exceed the stockholder's prior distributions from the Company.
Statement of Changes in Net Assets in Liquidation
_________________________________________________
The total of Net Assets in liquidation as of December 31, 1996 did
not change materially from the total as of June 30, 1996.
Plan of Complete Liquidation and Dissolution
____________________________________________
On February 2, 1996, the stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution for the Company. Pursuant
to the Plan, the Company has sold its three operating units and intends
to sell such of its remaining assets as are not to be distributed in
kind to its stockholders. The Company intends to provide for payment
of all expenses, liabilities and obligations of the Company and
liquidate via distributions to stockholders.
On February 12, 1997, the Company announced that it intends to make
an initial cash distribution to stockholders of approximately $5.00 per
share from its Net Assets in Liquidation, pursuant to the Plan, no
later than June 30, 1997, or earlier if conditions warrant. The Board
is currently unable to predict the precise amount of any additional
distributions pursuant to the Plan. The actual amount and timing of,
and record date for, all such additional distributions will be
determined by the Board of Directors, in its sole discretion, and will
depend in part upon the Board's determination as to whether particular
assets are to be distributed in kind or otherwise disposed of, and the
amounts deemed necessary by the Board to pay or provide for all the
Company's liabilities and obligations.
PAGE 6
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
________________________________
(a) Exhibits.
_________
2. Plan of Complete Liquidation and Dissolution -
incorporated by reference to Exhibit A to Proxy Statement
of the Company dated January 12, 1996 with respect to
Annual Meeting of Stockholders held February 2, 1996
(File No. 0-3344).
3. (a) Certificate of Incorporation - incorporated by
reference to Exhibit 3 (a) to the Company's Annual Report
on Form 10-KSB for the fiscal year ended June 30, 1993
(File No. 0-3344).
(b) By-Laws - incorporated by reference to Exhibit
3(b) to the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1993 (File No. 0-3344).
27. Financial Data Schedule
(b) Reports on Form 8-K.
___________________
Report on Form 8-K filed by Registrant for an event
dated December 18, 1996 - Items 4 and 7 (File No. 0-3344).
No other reportable items.
Page 7
SIGNATURES
__________
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASTROSYSTEMS, INC.
February 13, 1997 BY: /S/
_______________________________ ______________________________
Date Gilbert H. Steinberg,
Vice President
February 13, 1997 /S/
_______________________________ ______________________________
Date Gilbert H. Steinberg,
Treasurer and
Chief Financial Officer