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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
Commission file number: 0-18192
MEGAMATION INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3372947
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
51 Everett Drive
Building #B4
Lawrenceville, NJ 08648
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 609-799-7711
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report.)
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 (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 [ ]
As of September 30, 1995, there were 14,358,666 shares outstanding of the
Registrants common stock, $0.01 par value per share.
The Index to Exhibits appears on page 16.
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Item 1. Financial Statements
Statements of Financial Position
(Unaudited) (Audited)
September 30 June 30
1995 1995
------------ ------------
ASSETS
Current assets:
Cash......................................... $ 24,222 $ 264,225
Trade receivables, net of allowance for
doubtful accounts of $40,544.............. 695,072 700,191
Inventories.................................. 973,405 886,896
Prepaid expenses and other current assets.... 15,429 21,614
----------- -----------
Total current assets...................... 1,708,128 1,872,926
Property and equipment.......................... 249,492 273,933
Other assets:
Patents, net................................. 306,776 306,960
Other assets................................. 57,773 59,066
----------- -----------
Total assets................... $ 2,322,169 $ 2,512,885
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Revolving bank line of credit................ $ 1,700,000 $ 1,700,000
Term loans, related parties.................. 1,760,000 1,760,000
Accounts payable............................. 1,085,576 805,039
Accrued warranty costs....................... 89,243 89,927
Accrued interest payable..................... 78,485 21,222
Other customer deposits...................... 58,265 253,937
Accrued payroll and related expenses......... 78,245 75,644
---------- -----------
Total current liabilities................. 4,849,814 4,705,789
Commitments
Shareholders' deficit
Preferred stock, $0.01 par value; 1,000,000
shares authorized no shares issued
or outstanding............................ - -
Common stock, $0.01 par value; 25,000,000
shares authorized, 14,358,666 and
14,358,666 shares issued and outstanding,
respectively.............................. 143,587 143,587
Additional paid in capital................... 5,756,744 5,756,744
Accumulated deficit.......................... (8,427,976) (8,093,215)
----------- -----------
Total shareholders' deficit............... (2,527,645) (2,192,884)
----------- -----------
Total liabilities and
shareholders' deficit......... $ 2,322,169 $ 2,512,885
=========== ===========
The accompanying notes are an integral part of the financial statements
Item 1. Financial Statements
Statements of Operations
(Unaudited)
Three months ended
September 30
--------------------------
1995 1994
------------ ------------
Revenues...................................... $ 1,133,528 $ 1,008,595
Cost of revenues.............................. 963,694 579,011
------------ ------------
Gross profit............................... 179,834 429,584
Selling expenses.............................. 55,168 113,108
Development and engineering expenses.......... 115,650 82,565
General and administrative expenses........... 240,086 136,069
------------ ------------
Total operating expenses.................. 410,904 331,742
------------ ------------
Operating income/(loss)............... (231,070) 97,842
Interest expenses............................. 103,691 46,328
------------ ------------
Net income/(loss)......................... $ (334,761) 51,514
------------ ------------
Net income/(loss) per common share $(0.02) $0.00
------------ ------------
Weighted average common shares outstanding 14,358,666 13,760,840
------------ ------------
The accompanying notes are an integral part of the financial statements.
MEGAMATION, INC.
Item 1. Financial Statements
Statements of Cash Flows
(Unaudited)
Three months ended
September 30
----------------------
1995 1994
---------- ----------
FROM OPERATING ACTIVITIES:
Net income/(loss)..................................... $(334,761) $ 51,514
Adjustments to reconcile net income/(loss) to cash
used in operating activities:
Depreciation and amortization...................... 35,905 22,917
Decrease/(increase) in:
Trade Receivables................................ 5,119 (300,051)
Costs and estimated earnings on uncompleted
contracts, net of customer deposits............ - (216,205)
Inventories...................................... (86,509) (120,842)
Prepaid expenses and other current assets........ 6,185 13,867
Other assets..................................... 293 4,244
Increase/(decrease) in:
Accounts payable................................. 280,537 7,384
Accrued warranty costs........................... (684) 8,813
Accrued interest payable......................... 57,263 21,288
Customer deposits on uncompleted contracts,
net of costs and estimated earnings........... - (62,490)
Other customer deposits.......................... (195,672) 91,905
Accrued payroll and related expenses............. 2,601 (23,145)
-------- ----------
Cash used in operating activities.................. (229,723) (500,801)
FROM INVESTING ACTIVITIES:
Purchase of property and equipment................. (4,164) (1,812)
Costs of patents................................... (6,166) (9,089)
-------- ----------
Cash used in investing activities.................. (10,280) (10,901)
FROM FINANCING ACTIVITIES:
Aggregate amount of payments on the
bank line of credit........................... - (643)
Aggregate amount of advances from the
bank line of credit........................... - 424,493
Proceeds from Subscription Agreement............... - 105,000
-------- ----------
Cash from financing activities..................... 528,850
(DECREASE)/INCREASE IN CASH........................... (240,003) 17,148
Cash beginning of period........................... 264,225 7,417
-------- ----------
Cash end of period................................. $ 24,222 $ 24,565
-------- ----------
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid during the period.................... $ 47,336 $ 22,836
-------- ----------
The accompanying notes are an integral part of the financial statements.
MEGAMATION, INC.
September 30, 1995
Notes to Financial Statements
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q for quarterly reports under
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and
therefore do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles.
The financial information included in this report has been prepared in
conformity with the accounting principles reflected in the financial statements
included in the Annual Report on Form 10-K for the year ended June 30, 1995, as
filed with the Securities and Exchange Commission.
In the opinion of the management of Megamation Inc. (the "Company"), all
material adjustments necessary for a fair statement of the results of operations
for the interim periods presented (consisting of only normally recurring
accruals and estimates), have been recorded.
The results of operations for the period presented are not necessarily
indicative of the results to be expected for the entire year.
2. REVENUE RECOGNITION AND CONTRACT COSTS
--------------------------------------
The Company generally recognizes revenue upon the completion of one of the
following: (1) the performance of a service, (2) the shipment of product, or (3)
upon customer acceptance of completed units. The percentage of completion method
is used for long term contracts generally involving the integration of the
Company's products into a customer's production facility. Sales and operating
income are recognized as work is performed, based on the relationship between
actual labor cost incurred and the total labor cost estimated to be required. At
September 30 and June 30, 1995, there were no long term contracts in process. At
September 30 and June 30, 1994, five long term contracts were in process
(completed during fiscal 1995), for which the Company recorded $306,000 in
revenue and $62,700 of operating income in fiscal 1994 and $416,000 in revenue
and $85,000 of operating income in the quarter ended September 30, 1994.
Contract costs include all direct material and labor costs and those
indirect costs related to contract performance, such as indirect labor,
supplies, tools, repairs, and depreciation costs. Selling, general, and
administrative costs are charged to expense as incurred. Changes in job
performance, job conditions, and estimated profitability, including those
arising from contract penalty provisions, and final contract settlements may
result in revisions to costs and income and are recognized in the period in
which the revisions are determined.
MEGAMATION, INC.
September 30, 1995
Notes to Financial Statements
3. INVENTORIES
-----------
Inventories consist of parts and subassemblies, work-in-process, and
completed units which are valued at the lower of cost (first-in/first-out) or
market value. Inventories are comprised of the following:
September 30, June 30,
1995 1995
-------------- ----------
Parts and subassemblies.... $618,309 $786,575
Work in process............ 355,096 100,321
Finished goods............. -0- -0-
--- ---
Totals..................... $973,405 $886,896
======== ========
4. DEBT
----
The Company's debt consists of the following:
September 30, June 30,
1995 1995
-------------- ------------
Revolving bank line of credit.. $1,700,000 $1,700,000
Term loans..................... 1,760,000 1,760,000
---------- ----------
$3,460,000 $3,460,000
========== ==========
Under Agreements entered into on May 12, 1994, and amended on August 18,
1994, the Company is a party to a Credit and Security Agreement (the "Line")
with a New Jersey bank secured by trade receivables and guaranteed by two
principal stockholders and directors (the "Guarantors") pursuant to a Guarantee
Agreement ("Agreement"). The Line provides for maximum borrowings of
$1,700,000. Under the terms of the Agreement, the Guarantors each guarantee
one-half of the outstanding balance of the Line. The Line imposes borrowing
formula limitations of the sum of 85% of trade receivables and 40% of the
qualifying open order backlog. At June 30 and September 30, 1995, the Company
was not in compliance with the borrowing limitation requirements under the Line.
Borrowings under the Line bear interest at the prime rate (9% and 7.25% at June
30, 1995 and 1994, respectively). Additionally, the Guarantors each receive
quarterly fees calculated at a 1.5% annual rate on the average outstanding
balance of the Line. The Guarantee fee expense which is included in interest
expense was $45,187 for the year ended June 30, 1995 and $12,854 for the three
months ended September 30, 1995. The Line expires on January 1, 1996.
At June 30, 1994, the Term Loan (originally granted on December 21, 1988),
was owed to an entity controlled by one of the Guarantors and was scheduled to
mature on March 31, 1995. On February 11, 1994, the other Guarantor provided
the Company with an additional $230,000 in the form of a New Term Loan, also due
on March 31, 1995. On December 16, 1994, the original Term Loan and the New
Term Loan were amended to
MEGAMATION, INC.
SEPTEMBER 30, 1995
Notes to Financial Statements
provide for an additional $500,000 in borrowings from the Guarantors.
Additionally, the due dates of both Term Loans were extended to June 30, 1995.
Coincident with these amendments, the Company borrowed an additional $250,000.
In February 1995 the Company borrowed the remaining $250,000 available
under the Term Loans.
The annual interest rate on both Term Loans is prime plus 4% with a maximum
annual rate of 12%, payable quarterly in arrears. Substantially all of the
Company's assets are pledged as collateral for the Company's obligations under
the Term Loans, however the Term Loans have been subordinated to the Line.
Provisions of the Line and both Term Loans prohibit the Company from paying cash
dividends until these obligations are repaid. The interest rate on the Term
Loans at June 30 and September 30, 1995 was 12%.
On March 3, 1995, the Company entered into an agreement with its principal
stockholders to provide an additional $800,000 in the form of short term loans
through June 30, 1995 and the Company borrowed this amount during fiscal 1995.
In addition, past due interest of approximately $120,000 under the existing Term
Loans with the stockholders was deferred until July 1, 1995. On May 12, 1995,
the Company obtained an agreement for the extension of its Term Loans and the
Line until January 1, 1996. Additionally, the May 12, 1995 agreement modified
the lending terms of the March 3, 1995 agreement whereby the principal
stockholders provided $700,000 in the form of short term loans and deferred
$100,000 of the past due interest on the Term Loans to January 1, 1996. The May
12, 1995 agreement sets forth the parties intention to convert the $700,000 of
loans and the $100,000 of deferred past due interest to shares of the Company's
capital stock on terms and conditions to be agreed upon among the parties as
soon as is practicable. The principal stockholders have indicated their
willingness to accomplish such a conversion in connection with a financing
transaction to recapitalize the Company. No agreements or understanding with
respect to such conversion have been reached. Management is continuing to effect
such a transaction, however no assurance can be provided that the transaction
will consummated.
At June 30 and September 30, 1995, the Company was not in compliance with
several covenants under the Line and the Term Loans. As of November 10, 1995
such non-compliance was continuing and the agreements entered into on March 3
and May 12, 1995 do not cure the defaults.
5. Common Stock and Stock Warrant Transactions
-------------------------------------------
In August 1994, the Company's two principal stockholders each purchased
500,000 shares of Common Stock. Net proceeds to the Company were $105,000.
During fiscal 1995, 1,000,000 warrants at $.50 per share, were issued in
connection with the Term loans (Note 4).
6. Income Taxes
------------
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109 "Accounting for Income Taxes", effective July 1, 1993. The cumulative
effect of adopting SFAS No. 109 had no impact on the Company's financial
statements.
SFAS No. 109 provides for, among other things, the recognition of deferred
tax assets subject to a valuation allowance. At July 1, 1994, the Company
recorded a deferred tax asset of approximately $2,276,000 primarily relating to
net operating loss carryforwards ("NOL") which amounted to $5,113,000 at June
30, 1994. Also at July 1, 1994, the Company established a valuation allowance
equal to the full amount of the deferred tax asset.
For the years ended June 30, 1995 and 1994, no income tax expense or
benefit was recorded. The Company increased its deferred tax asset by
approximately $783,000 and $687,000, for the years ended June 30, 1995 and 1994
respectively, with corresponding increases in the valuation allowance. For the
three months ended September 30, 1995 there was no significant change in the
deferred tax asset.
The difference between the NOL for tax purposes of $6,867,000 and the NOL
for book purposes of $8,093,000 primarily reflects the net effect of timing
differences between the treatment of research and development costs for tax and
book purposes. The NOL's expire at various times and in varying amounts through
the year 2010.
These losses would generally be available to offset future taxable income,
if any. The utilization of Federal income tax loss caryforwards in any year is
subject to limitation if the Company experiences a certain level of changes in
ownership over any three year period. Management has recently determined that
the effects of changes in ownership through June 30, 1995 have not had a
material effect on the future utilization of the Company's operating loss
carryforwards. However, there have been substantial changes in ownership during
the prior three year period and future changes in ownership could result in a
substantial limitation on the amount of operating loss carryforwards which the
Company would apply in any one year to offset income.
7. Net Loss Per Common Share
-------------------------
Net losses per common share have been computed using the weighted average
number of common shares outstanding during the respective periods. Common stock
warrants and options outstanding were not included in the calculations, as the
effect of inclusion would be anti-dilutive.
MEGAMATION, INC.
September 30, 1995
Notes to Financial Statements
8. GOING CONCERN
-------------
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. During the year ended June 30,
1995 a nd the quarter ended September 30, 1995, the Company incurred net losses
of $1,991,000 and $335,000, respectively, and, as of September 30, 1995, the
Company's current liabilities exceeded its current assets by $3,142,000, and its
total liabilities exceeded its total assets by $2,528,000. These factors among
others indicated that at September 30, 1995 there is substantial likelihood that
the Company will be unable to continue as a going concern for a reasonable
period of time absent additional financing.
Management believes that the Company will be able to finance its
operations through December 31, 1995, provided that the holders of the Bank Line
of Credit and Term Loans do not exercise their rights to elect to accelerate the
due dates thereof. Management will attempt to obtain additional financing,
including the conversion by its principal stockholders' $800,000 of debt into
equity and negotiate further extensions of its Bank Line of Credit and various
Term Loans beyond the current January 1, 1996 maturity date. However, there can
be no assurance that such efforts will be successful.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
MEGAMATION, INC.
September 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
------------------------------------------------
Strategic and Financial Objectives
Throughout its history the Company has experienced significant losses and
corresponding negative cash flows from operations, which continued through the
quarter ended September 30, 1995 (see Note 8). To improve the Company's
financial results, management has implemented a business strategy that focuses
primarily on building specialized automation workstations for the healthcare
industry. The Company does not plan to continue supplying large-scale integrated
systems for diverse industries as it does not possess the human and financial
resources to effectively and profitably compete in building large-scale
integrated systems in that marketplace today.
The success of the Company's current strategy is primarily dependent on:
(a) the Company's ability to successfully serve a current strategic health care
industry customer, gain additional orders in the short term from this customer,
and use the success in serving this customer to develop customer relationships
with other leading health care industry companies, and (b) the Company's ability
to obtain sufficient working capital and financial resources to execute its
business plans.
Health Care Marketplace
The health care industry today faces extreme pressure to reduce costs and
errors, and improve safety. Management believes that in particular, clinical
laboratories require automation to meet these pressures. Health care industry
automation is currently in its infancy and the Company is currently a leader in
this marketplace. Management believes that the Company's automation workstations
are ideally suited for the health care industry and specifically clinical
laboratories because all of the Company's automation workstations incorporate an
automatic shutdown feature which is activated when any moving automatic tool
encounters an obstruction. This safety feature is extremely important in
applications where the automation systems require a high level of human
interaction, which is normally the case in clinical laboratories and other
health care applications. Additionally, the Company's automation workstations
have historically performed more work in less space than other traditional
automation systems. More work in less space is one of the most critical
requirements for controlling costs in healthcare industry applications.
10
MEGAMATION, INC.
September 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
------------------------------------------------
Results of Operations
Three Months Ended September 30, 1995 and 1994
Net Revenues and Cost of Revenues
Net revenues for the three months ended September 30, 1995 (the "current
quarter") were $1,134,000 compared to $1,009,000 for the three months ended
September 30, 1994, (the "prior quarter"), an increase of 12.4%. Cost of
revenues for the current quarter were 84.1% of net revenues compared to 57.4% of
net revenues in the prior quarter. During the prior quarter a one-time,
application specific technology license fee for $300,000 was recorded. Cost of
revenues for the prior quarter without the recognition of the $300,000 license
fee would have been 81.7%. Due to the recognition of the license fee, the gross
profit in the prior quarter increased to 42.6% compared to 15.9% in the current
quarter. Three MEGA 2(R) systems were sold during the current quarter
generating $570,000 of revenues versus no MEGA 2 systems sold during the
prior quarter. No revenues in the current quarter were recognized from the
percentage of completion method while the prior quarter realized revenues of
$416,000 by this method. Other revenues (primarily engineering, service, spare
parts, and training) were $564,000 during the current quarter versus $293,000
during the prior quarter.
Operating Expenses
Operating expenses increased 23.9% to $411,000 in the current quarter from
$332,000 in the prior quarter, an increase of $79,000. The increase in
operating expenses was due to higher general and administrative and research and
development expenses partially offset by a decrease in selling expenses.
Selling expenses decreased 51.2% to $55,000 during the current quarter from
$113,000 during the prior quarter, a decrease of $58,000. The decrease in
selling expenses was primarily the result of lower salary and related expenses
resulting from reduced headcount.
Research and development expenses increased 40.1% to $116,000 during the
current quarter from $83,000 during the prior quarter, an increase of $33,000.
The increase in research and development expense was primarily the result of
higher salary and related expense resulting from efforts on various development
projects relating to the MEGA 2.
General and administrative expenses increased 76.4% to $240,000 during the
current quarter from $136,000 during the prior quarter, an increase of $104,000.
The increase in general and administrative expenses was primarily due to
increases in professional fees, salary and related expenses and allocated
insurance costs.
11
MEGAMATION, INC.
September 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
------------------------------------------------
Interest and Debt Expense
Interest and debt expense increased 123.8% to $104,000 during the current
quarter from $46,000 during the prior quarter, an increase of $58,000. The
change was primarily due to increases from the prior quarter to the current
quarter in the revolving bank line of credit and the term loans with related
parties of $276,000 and $1,300,000 respectively. (see Note 4)
Net Loss
Net loss for the current quarter of $335,000 compared to net income of
$52,000 for the prior quarter. Loss per share for the current quarter was
($0.02) compared to $0.00 per share during the prior quarter. The primary
reason for the change from the $52,000 net income during the prior quarter to a
net loss of $335,000 during the current quarter was the impact in the prior
quarter from the recognition of the one time application specific license fee of
$300,000.
The increase in average common shares outstanding during the current
quarter resulted from the issuance of 1,000,000 shares on August 25, 1994 in
exchange for $105,000.
Liquidity and Capital Resources
The shareholders' deficit at September 30, 1995 was $2,528,000 which was
an increase of $335,000 from June 30, 1995, (the amount of the net loss for the
quarter ended September 30, 1995). Cash declined $240,000 from a beginning
balance of $264,000 to an ending balance of $24,000. The Company's current
liabilities exceeded its current assets by $3,142,000 and $554,000 at September
30, 1995 and 1994, respectively, primarily due to the bank line of credit and
term loans from related parties (see Note 4). [Trade accounts payable total
$1,086,000 and represent approximately sixty-seven days aging. Terms with most
of the Company's trade vendors are currently on a cash-on-delivery basis.]
As a result of (i) the decline in cash reserves, (ii) the uncertainty as
to the status and timing of both the receipt of the additional charges owed by
its health care customer and the anticipated additional orders from its health
care customer and (iii) a reduction in the Company's backlog to approximately
$500,000 at September 30, 1995, the Company will require an infusion of working
capital in order to fund its basic operations beyond approximately December 31,
1995 and extensions and forebearances with respect to $3,460,000 of loans which
are in default and which mature on January 1, 1996 in any event (see below). The
Company will also require substantial additional working capital to effectively
implement its business plans. While its strategy for addressing the health care
market is focused to maximize the Company's likelihood of success, while
12
MEGAMATION, INC.
September 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
------------------------------------------------
minimizing the marketing and selling costs associated with this effort, these
marketing and selling costs will still be substantial. In addition, the Company
can be expected to experience negative operating cash flow until it achieves
revenues of approximately six million ($6,000,000) per year.
The Company maintains a bank line of credit and has borrowed the maximum
limit of the bank line of $1,700,000. The bank line of credit, which matures on
January 1, 1996, is guaranteed by related parties. The Company has also borrowed
$1,760,000 in the form of term loans from the same related parties that
guarantee the bank line of credit.
The Company has not issued any common stock since August 1994, (see Note 5).
The Company and the related parties previously entered into an agreement
which provided that the related parties would convert $800,000 of principal and
accrued interest owed to them to capital stock on terms to be agreed upon. The
management of the Company and the related parties are exploring possible means
to obtain additional financing for the Company and management will seek
extensions and forebearances with respect to the bank line and term loans. No
agreements or understanding have been reached with respect to the contemplated
conversion or debt extensions and forebearances, nor can there be any assurances
that any such agreements will be reached. In addition, agreements with respect
to these matters will not obviate the Company's need for additional financing,
and there can be no assurances as to when or if such financing will be
available, or as to the terms, if any, on which such financing might become
available.
Capital investments have been curtailed because of the Company's lack of
financial resources. During the past year the only significant capital
investments have been for computers and software for the implementation of an
integrated accounting and manufacturing control system and the development of
the MEGA 2 and specialized MEGA 2 workstations. These projects have been
substantially completed.
13
MEGAMATION, INC.
September 30, 1995
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults upon Senior Securities.
As of September 30, 1995 the Company had accrued but not paid $53,000 in
interest due on term loans of $1,760,000 outstanding as of the same date. No
demand for payment of the amounts in default or notice of acceleration of the
Term Loans has been received by the Company. (See Notes to Financial
Statements-Note 4, and Management's Discussion and Analysis of Financial
Condition and Results of Operations-Liquidity and Capital Resources.)
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exh. No. Description
-------- -----------
10.1 Warrants issued on February 23, 1995 to Cooper
Investments to purchase 250,000 shares of
Company stock at $.50 per share.
10.2 Warrants issued on February 8, 1995 to Tristram
C. Colket Jr. to purchase 250,000 shares of
Company stock at $.50 per share.
10.3 Letter agreement between the Company, Max Cooper
of Cooper Investments and Tristram C. Colket,
Jr. dated September 20, 1995.
(b) No reports on Form 8-K were required to be filed with respect to
events occurring in the quarter ended September 30, 1995.
14
MEGAMATION, INC.
September 30, 1995
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.
MEGAMATION INCORPORATED
Date November 13, 1995 /s/ GERALD W. KLEIN/
---------------------- --------------------------------------
Gerald W. Klein
President, Chief Executive Officer,
Treasurer, Chief Financial Officer,
and Director
Date November 13, 1995 /s/ THOMAS W. MURPHY/
---------------------- --------------------------------------
Thomas W. Murphy
Controller, Chief Accounting Officer
and Secretary
15