UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 1-12694
SOLIGEN TECHNOLOGIES, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
WYOMING 95-4440838
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
19408 LONDELIUS STREET
NORTHRIDGE, CALIFORNIA 91324
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(818) 718-1221
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check whether the issuer (1) 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 filing requirements for the past 90 days. Yes [X] No [ ]
Number of shares of issuer's common stock outstanding as of February 3, 1998:
32,682,338
Transitional Small Business Disclosure Format: Yes [ ] No [X]
SOLIGEN TECHNOLOGIES, INC.
FORM 10-QSB
TABLE OF CONTENTS
PAGE
----
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at December 31, 1997
and March 31, 1997 ................................................. 3
Consolidated Statements of Operations for the three and nine months
ended December 31, 1997 and 1996 ................................... 4
Consolidated Statements of Cash Flows for the nine months ended
December 31, 1997 and 1996 .......................................... 5
Notes to Consolidated Financial Statements ......................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations .............................................. 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................................... 12
Item 2. Changes in Securities and Use of Proceeds........................... 13
Item 6. Exhibits and Reports on Form 8-K.................................... 14
Signatures ......................................................... 15
PART I: FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, MARCH 31,
1997 1997
------------ -----------
(UNAUDITED)
ASSETS
Current assets:
Cash $ 529,000 $ 506,000
Accounts receivable 647,000 723,000
Inventories 135,000 160,000
Prepaid expenses 56,000 49,000
---------- ----------
Total current assets 1,367,000 1,438,000
Property, plant and equipment 2,128,000 2,112,000
Less allowance for depreciation and amortization 1,225,000 1,004,000
---------- ----------
Net property, plant and equipment 903,000 1,108,000
Other assets 40,000 34,000
---------- ----------
TOTAL ASSETS $2,310,000 $2,580,000
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 393,000 $ 360,000
Trade accounts payable 410,000 251,000
Payroll and related expenses 151,000 146,000
Accrued expenses 109,000 105,000
Deferred revenue 169,000 131,000
---------- ----------
Total current liabilities 1,232,000 993,000
Notes payable, net of current portion 50,000 100,000
Stockholders' equity:
Common stock, no par value:
Authorized -- 50,000,000 shares;
Issued and outstanding: 32,682,338 at December 31
and 31,434,283 at March 31 10,185,000 9,776,000
Accumulated deficit (9,157,000) (8,289,000)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 1,028,000 1,487,000
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,310,000 $2,580,000
---------- ----------
The accompanying notes are an integral part of these financial statements.
3
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------ -------------------------------
1997 1996 1997 1996
---------- ---------- ---------- ------------
REVENUES $1,188,000 $1,334,000 $3,685,000 $ 2,627,000
---------- ---------- ---------- -----------
COST OF REVENUES 818,000 654,000 2,588,000 1,617,000
---------- ---------- ---------- -----------
Gross profit 370,000 680,000 1,097,000 1,010,000
---------- ---------- ---------- -----------
OPERATING EXPENSES:
Research and development 261,000 260,000 780,000 803,000
Selling 143,000 171,000 408,000 521,000
General and administrative 278,000 264,000 790,000 760,000
Non-cash compensation 39,000 -- 117,000 --
---------- ---------- ---------- -----------
Total operating expenses 721,000 695,000 2,095,000 2,084,000
---------- ---------- ---------- -----------
Loss from operations (351,000) (15,000) (998,000) (1,074,000)
OTHER INCOME (EXPENSE):
Interest income -- 4,000 2,000 15,000
Interest expense (8,000) (15,000) (23,000) (282,000)
Other income 152,000 -- 152,000 103,000
---------- ---------- ---------- -----------
Total other income (expense) 144,000 (11,000) 131,000 (164,000)
---------- ---------- ---------- -----------
LOSS BEFORE PROVISION FOR
INCOME TAXES (207,000) (26,000) (867,000) (1,238,000)
Provision for state income taxes -- 3,000 1,000 3,000
---------- ---------- ---------- -----------
NET LOSS $ (207,000) $ (29,000) $ (868,000) $(1,241,000)
---------- ---------- ---------- -----------
BASIC AND DILUTIVE
LOSS PER SHARE $ (0.01) $ (0.00) $ (0.03) $ (0.04)
---------- ---------- ---------- -----------
The accompanying notes are an integral part of these financial statements.
4
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED
DECEMBER 31,
-----------------------------
1997 1996
---------- ------------
Cash flows from operating activities
Net loss $(868,000) $(1,241,000)
Depreciation and amortization 293,000 285,000
Non-cash interest expense on convertible debt -- 250,000
Non cash compensation expense 117,000 --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 76,000 (542,000)
(Increase) decrease in inventories 63,000 (22,000)
(Increase) decrease in prepaid expenses (7,000) 16,000
Increase (decrease) in trade accounts payable 159,000 (230,000)
Increase (decrease) in payroll and related expenses 5,000 (38,000)
Increase in accrued expenses 4,000 2,000
Increase in deferred revenues 38,000 273,000
(Increase) decrease in other assets (6,000) 9,000
--------- -----------
Net cash used for operating activities (126,000) (1,238,000)
--------- -----------
Cash flows from investing activities:
Additions in property, plant and equipment (126,000) (146,000)
--------- -----------
Net cash used for investing activities (126,000) (146,000)
--------- -----------
Cash flows from financing activities:
Principal payments under capital lease obligations (27,000) (50,000)
Payments on notes payable (4,000) --
Proceeds from issuance of notes payable 220,000 --
Cancellation of notes payable to former owners of A-RPM (205,000) --
Convertible debentures, net of issuance costs -- 666,000
Exercise of warrants and sale of common stock 291,000 --
--------- -----------
Net cash provided by financing activities 275,000 616,000
--------- -----------
Net increase (decrease) in cash 23,000 (768,000)
Beginning of period 506,000 1,189,000
--------- -----------
End of period $ 529,000 $ 421,000
--------- -----------
The accompanying notes are an integral part of these financial statements.
5
SOLIGEN TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The financial information included herein for the three and nine-month
periods ended December 31, 1997 and 1996 is unaudited; however, such
information reflects all adjustments consisting only of normal recurring
adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows
for the interim periods. The financial information as of March 31, 1997, is
derived from Soligen Technologies, Inc's 1997 Form 10-KSB and 1997 Form
10-KSB/A-1. The interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's 1997 Form 10-KSB and 1997 Form 10-KSB/A-1.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
ACCOUNTING POLICIES
Reference is made to Note 1 of Notes to Financial Statements in the Company's
Annual Report on Form 10-KSB for the summary of significant accounting
policies.
INVENTORIES
Inventories are stated at the lower of cost or market on a first-in,
first-out basis. Inventories consist of the following:
DECEMBER 31 1997
----------------
Raw materials $ 84,000
Work in process 35,000
Finished goods 16,000
---------
Total inventory $135,000
---------
DEFERRED REVENUE
Deferred revenue relates to the DSPC technology profit center. The deferred
revenue related to machine revenues results mainly from the Company's
issuance of licenses for the use of the machines, or to support the machines
in the form of maintenance, rather than the outright sale of machines.
6
DEBT
NOTES PAYABLE AND CAPITAL LEASES
Notes payable and capital leases consist of the following at December 31, 1997
Notes payable to former owners of A-RPM, $100,000
(see Part II, Item 1)
Other notes due through 1998 222,000
Capital leases 121,000
--------
Total capital leases and notes payable 443,000
Less current portion (393,000)
--------
Long term portion $ 50,000
--------
7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENT AND ASSOCIATED RISKS
THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED LARGELY ON THE
COMPANY'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS AND
UNCERTAINTIES INCLUDING, AMONG OTHERS (i) CUSTOMER ACCEPTANCE OF THE
COMPANY'S "ONE STOP SHOP" PARTS NOW PROGRAM; AND (ii) THE COMPANY'S ABILITY
TO OBTAIN ADDITIONAL FINANCING REQUIRED TO SUPPORT ITS CONTINUING OPERATIONS
AND PROJECTED REVENUE GROWTH. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THESE FORWARD-LOOKING STATEMENTS. IN VIEW OF THESE RISKS AND UNCERTAINTIES,
THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS CONTAINED IN
THIS QUARTERLY REPORT ON FORM 10-QSB WILL IN FACT TRANSPIRE.
The following discussion should be read in conjunction with the accompanying
Financial Statements of Soligen Technologies, Inc. ("STI") and its
wholly-owned subsidiaries Soligen, Inc. ("Soligen") and Altop, Inc. ("Altop")
(collectively referred to herein as the "Company") including the notes
thereto, included elsewhere in this Quarterly Report.
OVERVIEW
The Company has developed a proprietary technology known as Direct Shell
Production Casting ("DSPC-Registered Trademark-"). This technology is
embodied in the Company's DSPC 300 System (the "DSPC System"), which produces
ceramic casting molds directly from Computer Aided Design ("CAD") files.
These ceramic molds are used to cast metal parts, which conform to the CAD
design. This unique capability distinguishes the DSPC System from rapid
prototyping technologies, which are characterized by the ability to produce
non-functional, three-dimensional representations of parts from CAD files.
The Company's DSPC System is based upon proprietary technology developed by
the Company and certain patent and other proprietary rights licensed to
Soligen, Inc. ("Soligen"), a wholly-owned subsidiary of the Company, by the
Massachusetts Institute of Technology ("MIT") pursuant to a license agreement
(the "License") dated October 18, 1991, as amended. Pursuant to the License,
MIT granted Soligen an exclusive, world-wide license to develop, manufacture,
market and sell products utilizing certain technology and processes for the
production of ceramic casting molds for casting metal parts patented by MIT
until October 1, 2006, and on a non-exclusive basis thereafter until the
expiration of the last patent relating to the licensed technology. The
exclusive period may be extended by mutual agreement of both parties.
The Company believes that the rapid mold production capabilities of the DSPC
System provide a substantial competitive advantage over existing producers of
cast metal parts. Use of the DSPC System eliminates the need to produce
tooling (patterns and core boxes) for limited runs of metal parts, thereby
reducing both the time and the labor otherwise required to produce ceramic
casting molds for casting the metal parts. It provides for a paradigm shift
by enabling engineers to postpone the design or the fabrication of production
casting tooling until after the designed part
8
has been functionally tested. This ability, in addition to expediting the
design verification and testing, enables manufacturers to save time and money
by designing the production casting tools, which are required for large
production runs, once and most likely correctly on the first attempt. The
DSPC System can be also used to produce the production tooling (usually made
of steel), required to cast the parts in larger production runs. To
capitalize on this advantage, the Company plans to form a network of rapid
response production facilities owned either by the Company or by licensed
third parties when sufficient capital is available. This network will
operate under the trade name Parts Now-Registered Trademark- service. These
facilities will include DSPC production facilities and foundries with
in-house machine shops. The Company intends to establish itself as a leading
manufacturer of cast metal parts by providing a seamless transition from CAD
file to finished part.
The Company is completing its transition from a development stage company
towards its goal of being a manufacturing / service company with continuing
revenues from operations. The Company operates four major revenue-generating
profit centers:
1. PARTS NOW CENTER ("PARTS NOW"): Oversees the "one stop shop" production
services from receipt of the customer's CAD file through production. Parts
Now is responsible for any contract which requires a combination of the
DSPC production center and conventional casting and CNC machining
expertise. It consists of program managers who oversee the transition from
CAD to first article, to tooling, to conventional casting and later to mass
production. The Parts Now Center acquires services from the DSPC
Production Center and the conventional casting and machining center at
cost.
2. DSPC PRODUCTION CENTER: Revenues result from the production and sale of
first article and short run quantities of cast metal parts made directly
from the customer's CAD file. This center also provides DSPC parts and
tool making services to the Parts Now Center. These services are charged
to Parts Now at cost. Revenues for this product line were initiated in the
quarter ended March 31, 1995.
3. CONVENTIONAL CASTING CENTER ("PRODUCTION PARTS"): Revenues result from the
production and sale of production quantities of cast and machined aluminum
parts for industrial customers. The Company began generating revenues in
this area through Altop, its aluminum foundry and machine shop, in July
1994. This center is limited to conventional casting of aluminum parts
that do not utilize DSPC made tooling.
4. DSPC TECHNOLOGY CENTER: Revenues result from the sale, lease, license or
maintenance of DSPC machines and from participation in research and
development projects wherein Soligen provides technological expertise.
9
RESULTS OF OPERATIONS
Revenues for the three months ended September 30, 1997, and the three and
nine months ended December 31, 1997 and 1996 were as follows:
THREE MONTHS
ENDED THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
------------- --------------------------- ----------------------------
1997 1997 1996 1997 1996
---------- ---------- --------- ---------- -----------
Parts Now-Registered Trademark- $ 118,000 $ 400,000 $ 690,000 $ 886,000 $1,157,000
DSPC-Registered Trademark- production 612,000 529,000 282,000 1,691,000 472,000
Production parts 229,000 188,000 235,000 635,000 835,000
DSPC-Registered Trademark- technology 305,000 71,000 127,000 473,000 163,000
---------- ---------- ---------- ----------
Total revenues $1,264,000 $1,188,000 $1,334,000 $3,685,000 $2,627,000
---------- ---------- ---------- ----------
Parts Now and DSPC combined revenues increased 27% from $730,000 in the
second quarter ended September 30, 1997 to $929,000 in the third quarter
ended December 31, 1997. Compared to the comparable period a year ago, DSPC
revenues increased 88% from $282,000 to $529,000. Parts Now revenues
declined 42% from $690,000 in the third quarter of fiscal 1997 to $400,000 in
the third quarter of fiscal 1998. The decline is a result of a positive
change in the nature of the new Parts Now programs which are spread over a
longer time period. Despite the growing interest in Parts Now programs,
which resulted in an increase in number and dollar value of Parts Now
programs booked, the immediate effect on the revenues of Parts Now programs
was a decrease in revenues in the quarter ended December 31, 1997.
Consequently, combined revenues for Parts Now and DSPC in the third quarter
of fiscal 1998 decreased by $43,000 or 4% over the similar period last year.
The backlog at the end of the third and fourth quarters of fiscal 1997 for
the Parts Now programs was less than 90 days while the backlog for the Parts
Now programs at the end of the third quarter of fiscal 1998 is spread over
several quarters. Management is encouraged by the increase in DSPC revenues
and believes the increase in the duration of Parts Now programs should result
in reduced volatility in the Parts Now programs product line.
Production parts revenues decreased from $229,000 for the quarter ended
September 30, 1997 to $188,000 or 18% for the quarter ended December 31,
1997. Production parts revenues decreased to $188,000 for the three months
ended December 31, 1997 from $235,000 or 20% for the similar period ended
December 31, 1996. In addition, production parts revenues decreased to
$635,000 for the nine months ended December 31, 1997 from $835,000 or 24% for
the similar period last year. The Company continues to de-emphasize
conventional castings and gradually replace them with Parts Now programs.
The Company believes that this transition enables it to replace lower profit
margin business segments, unrelated to Parts Now business strategy, with
Parts Now programs.
DSPC technology's revenues decreased to $71,000 from $305,000 for the
quarters ended December 31, 1997 and September 30, 1997, respectively. DSPC
technology revenues deceased to $71,000 from $127,000 for the quarters ended
December 31, 1997 and 1996, respectively, and increased to $473,000 from
$163,000 for the nine months ended December 31, 1997 and 1996,
10
respectively. The period ended September 30, 1997 included a $250,000
machine sale as previously noted. This sale of a DSPC machine is an unusual
event and is a part of the Company's support of MIT's licensees. Future
sales of machines to other MIT licensees will depend on the development of
their business.
The Company's revenues for the third quarter ended December 31, 1997, were
$1,188,000, a decrease of 11% compared to $1,334,000 in the quarter ended
December 31, 1996. Revenues for the quarter ended September 30, 1997
included a $250,000 machine sale; excluding this machine sale, revenues
increased from $1,014,000 to $1,188,000 or 17% for the quarter ended December
31, 1997. This machine sale was to another licensee of MIT's technology for
a non-competing field of use. Total revenues for the nine months ended
December 31, 1997 were $3,685,000, an increase of 40% compared to $2,627,000
for the nine months ended December 31, 1996. Combined revenues for Parts Now
and DSPC for the nine months ended December 31, 1997 increased to $2,577,000
from $1,629,000 or 58% over the nine months ended December 31, 1996.
Gross profit for the three and nine months ended December 31, 1997, was
$370,000 and $1,097,000, respectively, as compared to $680,000 and $1,010,000
for the three and nine months ended December 31, 1996. Beginning in the
first quarter ended June 30, 1997 and continuing through the third quarter
ended December 31, 1997, the Company has made and continues to make
investments in programs leading to the manufacture of production tooling.
The manufacture of production tooling is critical to the Company's business
strategy although in the short term it has a negative impact on gross
margins. In the third quarter of fiscal 1997 margins were high as a result
of parts and tooling shipped in the same quarter The launch of a Parts Now
program involves the creation of production tooling by DSPC. Production
tooling is a new application for DSPC and its launch requires more resources
at this stage. The main advantage of Parts Now programs is in the ability to
commence production rapidly. The margins on the Parts Now program product
are higher than conventional foundry margins. For the nine months ended
December 31, 1997, gross profits increased by $87,000 or 9% over the similar
period of the previous year. Consequently, gross margin as a percentage of
revenues decreased to 31 from 51 percent for the three-month periods ending
December 31, 1997, and 1996, respectively, and decreased to 30 from 38
percent for the nine months ended December 31, 1997 and 1996, respectively.
Research and development expenses were $261,000 and $260,000 for the quarters
ended December 31, 1997 and 1996, respectively. For the nine months ended
December 31, 1997 and 1996, research and development expenses were $780,000
or 21% of revenues and $803,000 or 31% of revenues, respectively. The
Company intends to continue development of the DSPC technology and its
applications as key to its business strategy.
Selling expenses decreased to $143,000 for the quarter ended December 31,
1997, from $171,000 for the quarter ended December 31, 1996. For the nine
months ended December 31, 1997 and 1996, selling expenses deceased to
$408,000 from $521,000, respectively. The decrease in selling expenses was
the result of the consolidation of Altop's and Soligen's sales departments.
11
General and administrative expenses increased to $278,000 for the quarter
ended December 31, 1997 from $264,000 for the quarter ended December 31,
1996. General and administrative expenses increased to $790,000 for the nine
months ended December 31, 1997 from $760,000 for the nine months ended
December 31, 1996.
The Company issued stock options to non-employees in fiscal 1996 and,
according to SFAS 123, non-cash compensation expense is to be recognized over
the expected period of benefit. As a result, the Company recognized $39,000
and $117,000, respectively, in the quarter and nine months ended December 31,
1997, and expects to recognize a total of approximately $156,000 non-cash
compensation expense during fiscal 1998.
On December 15, 1997, the Company settled its lawsuit and counterclaim with
A-RPM and recognized $152,000 other income in the quarter ended December 31,
1997. The other income is a result of the Company reversing notes payable,
net of accrued interest and legal expenses. (see Part II, Item 1).
CASH AND SOURCES OF LIQUIDITY
As of December 31, 1997, the Company had $1,176,000 in cash and accounts
receivable, a decrease of $53,000 from $1,229,000 at March 31, 1997. At
December 31, 1997, the Company reported working capital of $135,000 compared
to working capital of $445,000 at March 31, 1997.
In August 1997, the Company entered into an agreement with a commercial
lender for an up to $1 million revolving line of credit, collateralized by
receivable, inventory and fixed assets. The credit facility provides for the
advance rate of 75% of eligible accounts receivable.
The Company requires significant funds to continue operations. The Company
believes the net proceeds of notes payable issued in December 1997, current
cash and its revolving line of credit will be sufficient to meet its working
capital and capital expenditures requirements through April 30, 1998. The
Company is actively seeking to raise additional funds; however, there can be
no assurance to the success of these efforts.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A-RPM LAWSUIT AND COUNTERCLAIM SETTLEMENT
On June 30, 1994, Altop, Inc., a wholly owned subsidiary of the Company,
acquired substantially all of the assets of A-RPM Corporation, an aluminum
foundry and machine shop located in Santa Ana, California. The assets were
acquired pursuant to an Asset Purchase Agreement between
12
Altop, A-RPM, the Company and Leland K. and Nancy B. Lowry, the sole
shareholders of A-RPM. As payment for the assets, Altop delivered an initial
cash payment in the amount of $100,000 and three promissory notes in the
total principal amount of $220,000. Altop also assumed certain liabilities of
A-RPM and agreed to deliver an additional payment of up to $100,000
contingent upon determination of certain net asset values according to a
formula set forth in the Asset Purchase Agreement.
On March 22, 1995, the Company and Altop commenced an action against A-RPM
and the Lowrys in the Superior Court for Orange County, California. The
complaint in this action seeks damages for breach of the Asset Purchase
Agreement, fraud, and negligent misrepresentation. Pending resolution of
this dispute, the Company provided for a $305,000 liability in its
consolidated financial statements.
A Settlement Agreement and Mutual General Release was executed on December
15, 1997, in which Altop, Inc. and the Company agreed to pay to Leland K. and
Nancy B. Lowry the sum of $100,000, without interest, according to the
following schedule:
January 1, 1998 $ 20,000
February 1, 1998 through October 1, 1998 $ 8,500 per month
November 1, 1998 3,500
All of the parties settled all known disputes and resolved the claims to the
above referenced actions. To secure the payment obligation, Altop and the
Company executed a Stipulated Judgment in the Superior Court for Orange
County, California on December 15, 1997.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) In December 1997, the Company's Board of Directors approved a short-term
debt and warrant financing. The offering was completed in a private
placement transaction to accredited investors only pursuant to Regulation D
and Rule 506 thereunder. A total of six investors loaned a total of $220,000
to the Company in December 1997, and one investor loaned an additional
$40,000 to the Company in January 1998. Each investor received a promissory
note in the principal amount of the amount loaned, bearing interest at the
rate of 12% per annum and due six months from the date of the promissory
note. In addition, for each dollar loaned to the Company the investors
received a common stock purchase warrant exercisable for two shares of the
Company's common stock (resulting in the issuance of warrants exercisable for
a cumulative total of 520,000 shares of the Company's common stock). The
warrants are exercisable for a period of five years at $0.50 per share. A
finder's fee in the amount of $17,000 was paid to a non-employee member of
the Company's Board of Directors in consideration of services provided in
connection with the financing. One of the investors was a non-employee
member of the Company's Board of Directors, one investor was an employee
member of the Company's Board of Directors, and the remaining five investors
were private investors.
13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. The following exhibits are filed as part of this report:
NUMBER DESCRIPTION
------- --------------------
2.1 Share Exchange Agreement and Amendments (1)
2.2 MIT Share Acquisition Agreement (1)
2.3 Escrow Agreement (1)
2.4 Pooling Agreement (1)
3.1 Articles of Incorporation of Soligen Technologies, Inc. (1)
3.2 Bylaws of Soligen Technologies, Inc. (1)
3.3 First Amendment to Bylaws (3)
4.1 Modification Agreement (Pooling) (6)
4.2 Subscription Agreement for Private Placement (5)
4.3 Subscription Agreement for Private Placement (5)
4.4 Subscription Agreement for Private Placement (2)
4.5 Common Stock Purchase Warrant Agreement
11.1 Computation of Net Loss Per Share
27. Financial Data Schedule
(1) Incorporated by reference to the Registration Statement on Form 10-SB (Reg.
No. 1-12694) filed by the Company on December 20, 1993.
(2) Incorporated by reference to Amendment No. 1 to the Registration Statement
on Form 10-SB (Reg. No. 1-12694) filed by the Company on February 7, 1994.
(3) Incorporated by reference to Amendment No. 2 to the Registration Statement
on Form 10-SB (Reg. No. 1-12694) filed by the Company on February 22, 1994.
(5) Incorporated by reference to Form 10-QSB filed by the Company on November
14, 1995.
(6) Incorporated by reference to Form 10-KSB filed by the Company on June 17,
1996.
(b) No reports on Form 8-K were filed during the quarter ended December 31,
1997.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
SOLIGEN TECHNOLOGIES, INC.
Date: February 13, 1998 By: /s/ Yehoram Uziel
---------------------------------------
Yehoram Uziel
President, CEO and Chairman of the Board
(Principal executive officer)
Date: February 13, 1998 By: /s/ Robert Kassel
---------------------------------------
Robert Kassel
Chief Financial Officer
(Principal financial officer)
15