SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. FORM 10-Q (AMENDED 6 JANUARY 1997) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED: SEPTEMBER 30, 1996 COMMISSION FILE NO. 0-4076 EXOTECH INCORPORATED (Exact name of Registrant as Specified in Charter) State or Jurisdiction of Incorporation or Organization: DELAWARE IRS Identification No: 54-0700888 Address of Principal Office: 8502 Dakota Drive Gaithersburg, MD. 20877 Registrant's Telephone Number: (301) 948-3060 Indicate by checkmark 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 requirement 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 close of the period covered by this Report. CLASS: COMMON STOCK, PAR VALUE $0.10 ----------------------------- OUTSTANDING AT SEPTEMBER 30, 1996 942,387 ------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS The following is Management's discussion and analysis of certain significant factors which have affected the Company's earnings during the periods included in the accompanying consolidated condensed statement of operations. A summary of the period to period changes in the principal items included in the consolidated statement of operations is shown below: ------------------------------------ COMPARISON OF ---------------------------------- THREE MONTHS ENDED THREE MONTHS ENDED Sept 30 June 30 Sept 30 Sept 30 1996 1996 1996 1995 ------- ---------- ------- ---- Net Sales $110,796 $106,244 $110,796 $ 55,517 Cost of Sales 1,440 5,164 1,440 6,628 General & Administrative Expenses 144 295 144 853 Inventory Costs 98,712 103,170 98,712 45,050 Interest & Other 7,130 7,036 7,130 6,601 A-2 PART II. OTHER FINANCIAL INFORMATION ITEM 5. As in the past, a shortage of working capital continues to be a significant problem, resulting in occasional slow payments to creditors, and hampering the development of new business to the fullest extent possible. In the opinion of Management, the Company should be in a position to sustain operations at least until such time as the results of current contracts and negotiations for new business is determinable. Ultimate realization of the carrying value of prepaid expenses and advances, property and equipment, and miscellaneous other assets shown in the accompanying balance sheet depends upon sustained operations as a going concern. The dollar amount of the backlog as of September 30, 1996 was $237,952, a decrease of $41,048 from the backlog of the preceding quarter ended June 30, 1996. ITEM 6 (B) No reports on Form 8-K were filed in this quarter. A-3 I. CHANGE IN FINANCIAL POSITION IN THE THREE MONTHS ENDED SEPTEMBER 30, 1996. In the three months period ended September 30, 1996, an increase of working capital of $3,645 resulted from a net profit from operations of $3,370 and non-fund charges of $275. A loan of $20,000 was obtained from Spiral Biotech, Inc.. It is secured by the work-in-progress inventory of Laser Scanner instruments being under a purchase order from the lender for a total of $87,000. The pay down of the loan is scheduled out of the receipts for the instruments as they are delivered. The order covers ten instruments, the last of which is to be delivered in January 1997. The loan will be repaid in full at the delivery of the ninth unit. II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME THREE MONTH PERIOD LAST YEAR. Revenue for the quarter ended September 30, 1996, was higher by $55,279 or 96% than the results one year earlier. Operating costs were increased in the most recent quarter by $47,765 or 91% compared to the prior year. The result was an operating profit of $10,500 and a net gain of $3,370 compared to a net loss of $3,615 in the quarter ended one year earlier. The improvement of operating income, in the opinion of Management, is a continuation of the modest upturn achieved in the fourth quarter of fiscal year 1996. A-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the Company has duly caused this amended Report to be signed on its behalf by the undersigned thereunto duly authorized. EXOTECH INCORPORATED REGISTRANT DATE: January 7, 1997 ____________________________ /s/ Robert G. Lyle _____________________________________ ROBERT G. LYLE, PRESIDENT AND CHIEF EXECUTIVE OFFICER A-5