U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended December 31, 2001
-----------------
[_] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ____________ to ______________
Commission file number 0-29024
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BENTHOS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Massachusetts 04-2381876
(State or Other Jurisdiction of (I.R.S. Employer
Corporation or Organization) Identification No.)
49 Edgerton Drive, North Falmouth, Massachusetts 02556
(Address of Principal Executive Offices)
(508) 563-1000
Issuer's Telephone Number Including Area Code
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 issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No_____
--------
State the number of shares outstanding of each of the issuer's classes of Common
equity as of the latest practicable date:
Common Stock par value $.06 2/3 1,383,102
(Class) (Outstanding stock at February 11, 2002)
Transitional Small Business Disclosure Format (check one):
Yes ________ No X
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2
BENTHOS, INC. AND SUBSIDIARIES
FORM 10-QSB
FOR THE QUARTER ENDED
DECEMBER 31, 2001
INDEX
Page No.
Face Sheet 1
Index 2
Part I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited) 3
December 31, 2001 and
September 30, 2001
Condensed Consolidated Statements of Operations (unaudited) 4
Quarter Ended
December 31, 2001 and
December 31, 2000
Condensed Consolidated Statements of Cash Flow (unaudited) 5
Quarter Ended
December 31, 2001 and
December 31, 2000
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis 10
of Financial Condition and Results
of Operations
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Benthos, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)
Assets December 31, 2001 September 30, 2001
----------------- ------------------
Current Assets:
Cash and Cash Equivalents $ 14 $ 46
Accounts Receivable, Net 3,417 2,723
Inventories 4,246 5,101
Prepaid Expenses and
Other Current Assets 738 713
Deferred Tax Asset 1,650 1,650
---------- -----------
Total Current Assets 10,065 10,233
Property, Plant and Equipment, Net 1,708 1,810
Goodwill 2,657 2,657
Other Assets, Net 1,410 1,388
---------- -----------
$15,840 $16,088
========== ===========
Liabilities and Stockholders' Investment
Current Liabilities:
Current Portion of Long-Term Debt $ 786 $ 786
Line of Credit 400 500
Accounts Payable 1,603 1,520
Accrued Expenses 2,142 2,329
Customer Deposits 341 161
---------- -----------
Total Current Liabilities 5,272 5,296
---------- -----------
Long-Term Debt, Net of Current Portion 2,881 3,077
Stockholders' Investment:
Common stock, $.06 2/3 Par Value-
Authorized - 7,500 Shares
Issued - 1,653 Shares at December 31, 2001
and September 30, 2001 110 110
Capital in Excess of Par Value 1,569 1,569
Retained Earnings 6,638 6,667
Treasury Stock, at Cost (630) (631)
---------- -----------
Total Stockholders' Investment 7,687 7,715
---------- -----------
$ 15,840 $ 16,088
========== ===========
See accompanying notes to Condensed Consolidated Financial Statements
4
Benthos, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Quarter Ended
December 31, 2001 December 31, 2000
----------------- -----------------
Net Sales $ 4,643 $ 4,238
Cost of Sales 3,053 3,111
--------- ---------
Gross Profit 1,590 1,127
Selling, General and Administrative
Expenses 1,278 1,280
Research and Development Expenses 228 508
Amortization of Goodwill -- 66
Amortization of Acquired Intangibles 60 60
--------- ---------
Income (Loss) from Operations 24 (787)
Interest Income -- 21
Interest Expense (65) (104)
--------- ---------
Loss Before Benefit for
Income Taxes (41) (870)
Benefit for Income Taxes (13) (261)
--------- ---------
Net Loss $ (28) $ (609)
========= =========
Basic and Diluted Loss Per Share $ (0.02) $ (0.44)
========= ==========
Weighted Average Number of
Shares Outstanding 1,383 1,379
========= =========
See accompanying notes to Condensed Consolidated Financial Statements
5
Benthos, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
Quarter Ended
December 31, 2001 December 31, 2000
----------------- -----------------
Cash Flows from Operating Activities:
Net Loss $ (28) $ (609)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used In) Operating Activities:
Depreciation and Amortization 206 287
Changes in Assets and Liabilities:
Accounts Receivable (694) 117
Inventories 855 142
Prepaid Expenses and Other Current Assets (25) 38
Accounts Payable and Accrued Expenses (104) (454)
Customer Deposits 180 (78)
-------- --------
Net Cash Provided by (Used In) Operating Activities 390 (557)
Cash Flows from Investing Activities:
Purchases of Property, Plant and Equipment (39) (235)
Increase in Other Assets (87) (82)
-------- --------
Net Cash Used in Investing Activities (126) (317)
Cash Flows from Financing Activities:
Payments on Line of Credit (100) --
Payments on Long-Term Debt (196) (196)
-------- --------
Net Cash Used in Financing Activities (296) (196)
Net Decrease in Cash and Cash Equivalents (32) (1,070)
Cash and Cash Equivalents, Beginning of Period 46 1,474
-------- --------
Cash and Cash Equivalents, End of Period $ 14 $ 404
======== ========
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 61 $ 104
======== ========
Income Taxes Paid, Net of Refunds $ 6 $ 50
======== ========
See accompanying notes to Condensed Consolidated Financial Statements
6
Benthos, Inc. and Subsidiaries
Notes to Financial Statements
(in thousands, except per share amounts)
1. Fiscal Periods
The fiscal year of Benthos, Inc. (the Company) ends on September 30 each year.
Interim quarters are comprised of 13 weeks unless otherwise noted and end on the
Sunday closest to December 31, March 31, and June 30. All references in the
unaudited condensed consolidated financial statements to fiscal periods ended on
December 31, March 31, or June 30 mean the interim quarters referred to above.
2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission regarding interim financial reporting. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements and should be
read in conjunction with the consolidated financial statements and notes thereto
for the fiscal year ended September 30, 2001, included in the Company's
previously filed Form 10-KSB. The accompanying condensed consolidated financial
statements reflect all adjustments (consisting solely of normal, recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods presented. The results of
operations for the interim period are not necessarily indicative of the results
to be expected for the full fiscal year. Certain reclassifications have been
made to the 2001 financial statements to conform with the 2002 presentation.
3. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market and
consist of the following:
December 31, 2001 September 30, 2001
------------------- --------------------
Raw Materials $ 374 $ 375
Work-in-Process 3,851 4,704
Finished Goods 21 22
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$ 4,246 $ 5,101
======= =======
7
4. Earnings (Loss) Per Share
A reconciliation of basic and diluted shares outstanding is as follows:
Quarter Ended December 31,
2001 2000
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Basic weighted average common shares outstanding 1,383 1,379
Weighted average common share equivalents -- --
------- -------
Diluted weighted average shares outstanding 1,383 1,379
======= =======
The following securities were not included in computing earnings per share
because their effects would be anti-dilutive.
Quarter Ended December 31,
2001 2000
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Options to purchase common stock 337 197
======= =======
5. Segment Reporting
The Company views its operations and manages its business as two segments,
Undersea Systems and Package Inspection Systems, as being strategic business
units that offer different products. The Company evaluates performance of its
operating segments based on revenues from external customers, income from
operations and identifiable assets.
Quarter Ended December 31,
2001 2000
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Sales to Unaffiliated Customers:
Undersea Systems $ 3,016 $ 2,950
Package Inspection Systems 1,627 1,288
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Total $ 4,643 $ 4,238
Income (Loss) from Operations:
Undersea Systems $ (111) $ (585)
Package Inspection Systems 135 (202)
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Total $ 24 $ (787)
Identifiable Assets:
Undersea Systems $ 9,990 $11,240
Package Inspection Systems 2,928 2,945
Corporate Assets 2,922 2,343
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Total $15,840 $16,528
======= =======
8
Revenues by geographic area for the quarter ended December 31, 2001 and 2000
were as follows:
Geographic Area 2001 2000
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United States $ 3,832 $ 2,942
Other 811 1,296
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Total $ 4,643 $ 4,238
======= =======
6. Credit Facility
The Company has a credit facility with a bank. This facility provides for loans
under two notes: a $5,500 variable rate term note and a $800 line of credit. The
term note is payable in 84 consecutive equal monthly installments of principal
with interest at prime (4.75% at December 31, 2001) plus 2%, or 7%, whichever is
higher. The term note matures in August 2006. The line of credit expires on
January 31, 2003. Borrowings under the line of credit are payable as follows:
monthly payments of interest only and unpaid principal and accrued and unpaid
interest at maturity. The interest rate under the line of credit is either prime
(4.75% at December 31, 2001) plus 2%, or 7%, whichever is higher. Advances are
limited to 35% of eligible accounts receivable. The availability under the line
of credit was $716 as of December 31, 2001. There were $400 in advances
outstanding under the line of credit as of December 31, 2001. The credit
facility is secured by substantially all of the assets of the Company and
requires the Company to meet certain covenants, including debt service coverage.
As of December 31, 2001, the Company was not in compliance with two of these
covenants. In February of 2002, the Company obtained a waiver of this default.
The amount available under the secured line of credit will become $600 after
March 31, 2002. In January 2002, the line of credit was paid in full.
7. New Accounting Standards
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
141, Business Combinations. SFAS No. 141 addresses changes in the financial
accounting and reporting for business combinations and supersedes APB Opinion
No. 16, Business Combinations, and SFAS No. 38, Accounting for Pre-acquisition
Contingencies of Purchased Enterprises. Effective July 1, 2001, all business
combinations should be accounted for using only the purchase method of
accounting.
In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets". This statement applies to goodwill and intangible assets acquired after
June 30, 2001, as well as goodwill and intangible assets previously acquired.
Under this statement goodwill as well as certain other intangible assets,
determined to have an infinite life, will no longer be amortized, instead these
assets will be reviewed for impairment on a periodic basis. Early adoption of
this statement is permitted for fiscal year-end companies whereby the entity's
fiscal year begins after March 15, 2001 and its first interim period financial
statements have not been issued. Pursuant to this statement, the Company elected
early adoption during the first fiscal quarter ended December 31, 2001. The
goodwill associated with the Datasonics acquisition is no longer subject to
amortization. Accordingly, the goodwill will be subject to an annual assessment
for impairment. As a result, the Company's amortization expense for the first
quarter of fiscal year 2002 is $66 lower than the first quarter of fiscal year
2001. The Company is currently evaluating the ultimate impact of this statement
on its results of operations and financial position. In addition, the Company
will be required to do a fair value impairment analysis of this goodwill.
In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This Statement addresses financial accounting and reporting for
obligations associated with the retirement of
9
tangible long-lived assets and the associated asset retirement costs. This
Statement applies to all entities. It applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and (or) the normal operation of a long-lived asset,
except for certain obligations of lessees. This Statement is effective for
financial statements issued for fiscal years beginning after June 15, 2002. The
Company believes that this statement will not have a material impact on
operations.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement supersedes FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, and the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions. Under this statement
it is required that one accounting model be used for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired, and it
broadens the presentation of discontinued operations to include more disposal
transactions. The provisions of this statement are effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years, with early adoption permitted. The
Company is currently evaluating the ultimate impact of this statement on its
results of operations and financial position until such time as its provisions
are applied.
8. Comprehensive Loss
SFAS No. 130, Reporting Comprehensive Income, requires disclosure of all
components of comprehensive loss. Comprehensive loss is defined as the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. The Company does not have any
items of comprehensive loss other than net loss.
10
Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Dollars in Thousands)
Results of Operations -- First quarter of fiscal year 2002 compared with first
quarter of fiscal year 2001.
The following table presents, for the periods indicated, the percentage
relationship of Condensed Consolidated Statements of Earnings items to total
sales:
Quarter Ended
December 31, 2001 December 31, 2000
----------------- -----------------
(unaudited)
Net Sales 100.0% 100.0%
Cost of Sales 65.7% 73.4%
------- -------
Gross Profit 34.3% 26.6%
Selling, General & Administrative Expenses 27.6% 30.2%
Research and Development Expenses 4.9% 12.0%
Amortization of Goodwill --% 1.6%
Amortization of Acquired Intangibles 1.3% 1.4%
------- -------
Income (Loss) from Operations .5% (18.6)%
Interest Income --% .5%
Interest Expense (1.4)% (2.5)%
------- -------
Loss Before Benefit
for Income Taxes (.9)% (20.6)%
Benefit for Income Taxes (.3)% (6.2)%
------- -------
Net Loss (.6)% (14.4)%
======= =======
Sales. Net sales increased by 9.6% in the first quarter of fiscal year 2002 to
$4,643 as compared to $4,238 in the first quarter of fiscal year 2001. Sales of
the Package Inspection Systems Division increased by 26.3% to $1,627 in the
first quarter of fiscal year 2002 as compared to $1,288 in the first quarter of
fiscal year 2001. The increase resulted largely from the timing of orders. Sales
of the Undersea Systems Division increased by 2.2% to $3,016 in the first
quarter of fiscal year 2002 as compared to $2,950 in the first quarter of fiscal
year 2001. The increase in sales was concentrated in the geophysical, remotely
operated vehicle (ROV), geophysical hydrophone, and glass flotation product
areas, as compared to the first quarter of fiscal year 2001.
Gross Profit. Gross Profit increased by 41.1% to $1,590 for the first quarter of
fiscal year 2002 as compared to $1,127 for the first quarter of fiscal year
2001. As a percentage of sales, gross profit was 34.3% in the first quarter of
fiscal year 2002 as compared to 26.6% in the first quarter of fiscal year 2001.
The increase in gross profit dollars and percentage is attributed primarily to
increased shipments, higher product mix of Package Inspection Systems Division
products which provide higher gross profit, and less unabsorbed overhead
resulting from increased sales volume.
11
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased slightly to $1,278 for the first quarter of
fiscal year 2002 as compared to $1,280 in the first quarter of fiscal year 2001.
As a percentage of sales, selling, general and administrative expenses decreased
to 27.6% in the first quarter of fiscal year 2002 as compared to 30.2% for the
first quarter of fiscal year 2001. The decrease in selling, general, and
administrative expenses as a percentage of sales is a result of increased sales
volume as compared to the first quarter of fiscal year 2001.
Research and Development Expenses. Research and development expenses decreased
55.1% to $228 for the first quarter of fiscal year 2002 as compared to $508 in
the first quarter of fiscal year 2001. As a percentage of sales, research and
development expenses decreased to 4.9% of sales in the first quarter of fiscal
year 2002 from 12.0% in the first quarter of fiscal year 2001. The decrease in
the overall level of expenditures is a result of the completion in fiscal 2001
of several development projects that were active in the first quarter of fiscal
year 2001, the elimination of certain outside costs that existed in the first
quarter of fiscal year 2001, and the temporary reassignment of engineering
resources.
Amortization of Goodwill. As a result of the Company's early adoption of SFAS
No. 142, Goodwill and Other Intangible Assets, goodwill, as well as certain
other intangible assets determined to have an indefinite life, will no longer be
amortized. Such intangible assets will be subject to an annual assessment for
impairment by applying a fair-value based test. The Company is currently
assessing these assets for impairment and has not determined whether, or the
extent to which, there will be any effect on the Company's financial position.
The goodwill relates to the Datasonics acquisition in fiscal year 1999.
Amortization of Other Acquired Intangibles. Amortization of other acquired
intangibles was $60 in the first quarters of fiscal years 2002 and 2001. The
amortization of other acquired intangibles relates to the Datasonics acquisition
in fiscal year 1999.
Interest Income. Interest income decreased to $0 in the first quarter of fiscal
year 2002 as compared to $21 in the first quarter of fiscal year 2001. The
decrease in interest income was a result of lower invested cash balances.
Interest Expense. Interest Expense decreased to $65 in the first quarter of
fiscal year 2002 as compared to $104 in the first quarter of fiscal year 2001.
The decrease in interest expense dollars was a result of reduced interest rates
and reduced principal on the variable rate term loan used to finance the
Datasonics acquisition.
Benefit for Income Taxes. The benefit for income taxes decreased to $13 in the
first quarter of fiscal year 2002 as compared to a benefit of $261 in the first
quarter of fiscal year 2001. The effective tax rate used in the first quarter of
fiscal years 2002 and 2001 was 30.0%. The rate used is lower than the statutory
rate due primarily to the benefit from the Company's Foreign Sales Corporation.
Liquidity and Capital Resources. The Company's cash and cash equivalents
decreased $32 from September 30, 2001 to December 31, 2001. Cash of $390 was
generated in operating activities, primarily the result of the net loss incurred
during the quarter offset by depreciation and amortization and changes in
operational assets and liabilities. The Company also used $126 and $296 of cash
in its investing and financing activities, respectively. Investing activities
represents primarily the payments on a split-dollar life insurance policy and
financing activities represents the payment of the installment payments on the
term note and partial repayment on the line of credit.
The Company has a credit facility with a bank. This facility provides for loans
under two notes: a $5,500 variable rate term note and a $800 line of credit. The
term note is payable in 84 consecutive equal monthly installments of principal
with interest at prime (4.75% at December 31, 2001) plus 2%, or 7%, whichever is
higher. The term note matures in August 2006. The line of credit expires on
January 31, 2003. Borrowings under the line of credit are payable as follows:
monthly payments of interest only and unpaid principal and accrued and unpaid
interest at maturity. The interest rate under the line of credit is either prime
(4.75% at December 31, 2001) plus 2%, or 7%, whichever is higher. Advances are
limited to 35% of
12
eligible accounts receivable. The availability under the line of credit was $716
as of December 31, 2001. There were $400 in advances outstanding under the line
of credit as of December 31, 2001. The credit facility is secured by
substantially all of the assets of the Company and requires the Company to meet
certain covenants, including debt service coverage. As of December 31, 2001, the
Company was not in compliance with two of these covenants. In February of 2002,
the Company obtained a waiver of this default. The amount available under the
secured line of credit will become $600 after March 31, 2002.
In January 2002, the Company received a $662 refund as a result of a carryback
of tax losses. The Company paid the outstanding balance of the line of credit
with the proceeds.
The Company believes it is well-positioned to finance future working capital
requirements and capital expenditures during the next twelve months through cash
on hand and available credit facilities.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995.
The statements in this Quarterly Report on Form 10-QSB and in oral statements
which may be made by representatives of the Company relating to plans,
strategies, economic performance and trends and other statements that are not
descriptions of historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking information is inherently subject to risks and
uncertainties, and actual results could differ materially from those currently
anticipated due to a number of factors which include: the timing of large
project orders, competitive factors, shifts in customer demand, government
spending, economic cycles, availability of financing as well as the factors
described in this report. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described herein as anticipated,
believed, estimated, expected or intended.
13
Part II -- Other information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits set forth in the Exhibit Index on the following page are filed
herewith as a part of this report.
(b) Reports on Form 8-K
None
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.
BENTHOS, INC.
By /s/ Francis E. Dunne, Jr.
Francis E. Dunne, Jr.
Vice President, Chief Financial Officer,
and Treasurer
(Principal Financial and Accounting Officer)
DATE: February 11, 2002
BENTHOS, INC.
EXHIBIT INDEX
Exhibit
- -------
3.1 Restated Articles of Organization (1)
3.2 Articles of Amendment dated April 28, 1997 (2)
3.3 Articles of Amendment dated April 20, 1998 (5)
3.4 By-Laws (1)
3.5 By-Law Amendments adopted January 23, 1998 (4)
4.1 Common Stock Certificate (1)
10.1 Employment Contract with Samuel O. Raymond (1)
10.2 Amendment to Employment Contract with Samuel O. Raymond (2)
10.3 Employment Contract with John L. Coughlin (1)
10.4 Amended and Restated Employment Agreement with John L. Coughlin (10)
10.5 Severance Agreement with John L. Coughlin (13)
10.6 Employment Agreement with Ronald L. Marsiglio dated May 21, 2001 (15)
10.7 Employment Agreement with Francis E. Dunne, Jr. (11)
10.8 Employee Stock Ownership Plan (1)
10.9 First Amendment to Employee Stock Ownership Plan (2)
10.10 Second Amendment to Employee Stock Ownership Plan (8)
10.11 Third Amendment to Employee Stock Ownership Plan (8)
10.12 Fourth Amendment to Employee Stock Ownership Plan (11)
10.13 Fifth Amendment to Employee Stock Ownership Plan (11)
10.14 401(k) Retirement Plan (1993)(1)
10.15 First Amendment to 401(k) Retirement Plan (2)
10.16 Second Amendment to 401(k) Retirement Plan (2)
10.17 Third Amendment to 401(k) Retirement Plan (3)
10.18 401(k) Retirement Plan (1999)(8)
10.19 First Amendment to 1999 401(k) Retirement Plan (11)
10.20 Second Amendment to 1999 401(k) Retirement Plan (11)
10.21 Third Amendment to 1999 401(k) Retirement Plan (14)
10.22 Supplemental Executive Retirement Plan (1)
10.23 1990 Stock Option Plan (1)
10.24 Stock Option Plan for Non-Employee Directors(1)
10.25 1998 Non-Employee Directors' Stock Option Plan (4)
10.26 Benthos, Inc. 2000 Stock Incentive Plan (9)
10.27 License Agreement between the Company and The Penn State Research
Foundation dated December 13, 1993 (1)
10.28 Technical Consultancy Agreement between the Company and William D.
McElroy dated July 12, 1994 (1)
10.29 Technical Consultancy Agreement between the Company and William D.
McElroy dated October 1, 1996 (3)
10.30 General Release and Settlement Agreement between the Company and
Lawrence W. Gray dated February 8, 1996 (1)
10.31 Line of Credit Loan Agreement between the Company and Cape Cod Bank and
Trust Company dated September 24, 1990, as amended (1)
10.32 Commercial Mortgage Loan Extension and Modification Agreement between
the Company and Cape Cod Bank and Trust Company, dated July 6, 1994 (1)
10.33 Credit Agreement between the Company and Cape Cod Bank and Trust Company
dated August 18, 1999 (8)
10.34 First Amendment to Credit Agreement dated March 23, 2001 (14)
10.35 Second Amendment to Credit Agreement dated December 12, 2001.
10.36 License Agreement between the Company and Optikos Corporation dated July
29, 1997 (3)
10.37 Hydrophone License Agreement between the Company and Syntron, Inc. dated
December 5, 1996 (6)
10.38 Amendment Number 1 to Hydrophone License Agreement between the Company
and Syntron, Inc. dated September 11, 1998 (6)
10.39 Asset Purchase Agreement among Benthos, Inc., Datasonics, Inc., and
William L. Dalton and David A. Porta (7)
10.40 Settlement Agreement and Mutual Release dated October 18, 2001 between
the Company and RJE International, Inc.(16)
21 Subsidiaries of the Registrant (1)
(1) Previously filed as an exhibit to Registrant's Registration
Statement on Form 10-SB filed with the Commission on December 17, 1996
(File No. O-29024) and incorporated herein by this reference.
(2) Previously filed as an exhibit to Registrant's Quarterly Report on
Form 10-QSB for the quarterly period ended March 30, 1997 (File No.
O-29024) and incorporated herein by this reference.
(3) Previously filed as an exhibit to Registrant's Quarterly Report on
Form 10-QSB for the quarterly period ended June 29, 1997 (File No.
O-29024) and incorporated herein by this reference.
(4) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 1997
(File No. O-29024) and incorporated herein by this reference.
(5) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended March 31, 1998 (File
No. 0-29024) and incorporated herein by this reference.
(6) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 1998
(File No. 0-29024) and incorporated herein by this reference.
(7) Previously filed as an exhibit to Registrant's Current Report on
Form 8-K filed on or about August 27, 1999 (File No. 0-29024) and
incorporated herein by this reference.
(8) Previously filed as an exhibit to Registrant's Annual Report on
Form 10-KSB for the fiscal year ended September 30, 1999 (File No.
0-29024) and incorporated herein by this reference.
(9) Previously filed as an exhibit to the Registrant's definitive
proxy statement filed on Schedule 14A on or about January 18, 2000 and
incorporated herein by this reference.
(10) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 1999
(File No. 0-29024) and incorporated herein by this reference.
(11) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended June 30, 2000 (File
No. 0-29024) and incorporated herein by this reference.
(12) Previously filed as an exhibit to the Registrant's Annual Report
on Form 10-KSB for the fiscal year ended September 30, 2000 (File No.
0-29024) and incorporated herein by this reference.
(13) Previously filed as an exhibit to Amendment No. 1 to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2000 (File No. 0-29024) and incorporated herein by this
reference.
(14) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended March 31, 2001 (File
No. 0-29024) and incorporated herein by this reference.
(15) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended June 30, 2001 (File
No. 0-29024) and incorporated herein by this reference.
(16) Previously filed as an exhibit to the Registrant's Annual Report
on Form 10-KSB for the fiscal year ended September 30, 2001 (File No.
0-29024) and incorporated herein by this reference.