-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HpeNPV4S3filvaqAWQ4p7SMT+iOlL5j+Sg9Mv6ofJVNiOASwBMx1EmOZt/eUjdXA VwcWbDkurwjUUx9tHISJEg== 0000898430-96-001551.txt : 19960506 0000898430-96-001551.hdr.sgml : 19960506 ACCESSION NUMBER: 0000898430-96-001551 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960503 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERSONAL COMPUTER PRODUCTS INC CENTRAL INDEX KEY: 0000725394 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 330021693 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-12641 FILM NUMBER: 96555697 BUSINESS ADDRESS: STREET 1: 11031 VIA FRONTERA, SUITE#100 CITY: SAN DIEGO STATE: CA ZIP: 92127 BUSINESS PHONE: 6194858411 MAIL ADDRESS: STREET 1: 10865 RANCHO BERNARDO RD CITY: SAN DIEGO STATE: CA ZIP: 92127 10QSB 1 QUARTERLY STATEMENT ENDING 3/31/96 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 MARCH 31, 1996 or [_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file No. 0-12641 [LOGO OF PCPI] PERSONAL COMPUTER PRODUCTS, INC. (Exact name of small business issuer as specified in its charter) DELAWARE 33-0021693 (State or other jurisdiction of (IRS Employer ID No.) incorporation or organization) 11031 VIA FRONTERA, SUITE 100 SAN DIEGO, CALIFORNIA 92127 (Address of principal executive offices) Issuer's Telephone Number, Including Area Code: (619) 485-8411 Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Common Stock, $0.005 par Outstanding at April 30, 1996: 27,575,422 Shares - ------------------------------- ------------------------------------------------
Transitional Small Business Disclosure Format (Check one): Yes [_] No [X] PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES
================================================================================ INDEX - -------------------------------------------------------------------------------- PAGE NO. Part I. Financial Information: Consolidated Condensed Balance Sheet, March 31, 1996 1 Consolidated Condensed Statement of Operations Three Months ended March 31, 1996 and 1995 2 Consolidated Condensed Statement of Operations Nine Months ended March 31, 1996 and 1995 3 Consolidated Condensed Statement of Cash Flows Nine Months ended March 31, 1996 and 1995 4 Notes to Consolidated Condensed Financial Statements 5 Management's Discussion and Analysis or Plan of Operations 6 Part II. Other Information 10 ================================================================================
PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET (unaudited) MARCH 31, 1996 - ------------------------------------------------------------------------------------------------ ASSETS - ------------------------------------------------------------------------------------------------ Current assets: Cash $ 1,913,000 Accounts receivable, net 1,069,000 Inventories 331,000 Other current assets 19,000 ----------- Total current assets $ 3,332,000 Capitalized software, net 26,000 Prepaid licenses, net 49,000 Property and equipment, net 248,000 ----------- $ 3,655,000 =========== - ------------------------------------------------------------------------------------------------ LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------ Current liabilities: Accounts payable $ 1,555,000 Accrued expenses 438,000 Deferred revenues 653,000 Notes payable 755,000 ----------- Total current liabilities 3,401,000 ----------- Shareholders' equity: 5% convertible preferred stock $1,000 par value, 7,500 shares authorized, 2,318 issued and outstanding 2,318,000 5% series B convertible preferred stock $1,000 par value, 117 shares authorized, 116.2 issued and outstanding 1,162,000 Preferred stock $1,000 par value, 2,383 authorized, no shares issued and outstanding Common stock $.005 par value, 50,000,000 shares authorized, 25,542,087 shares 128,000 issued and outstanding Paid-in capital 20,773,000 Accumulated deficit (24,127,000) ----------- Total shareholders' equity 254,000 ----------- $ 3,655,000 =========== ================================================================================================
See accompanying notes to consolidated condensed financial statements. 1 PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)
======================================================================================== Three months ended March 1996 1995 - ---------------------------------------------------------------------------------------- Revenues: Sales of products $ 1,720,000 $ 3,137,000 Engineering fees 931,000 406,000 License fees and royalties 163,000 5,000 ----------- ----------- 2,814,000 3,548,000 ----------- ----------- Costs and expenses: Cost of products sold 1,404,000 2,804,000 Selling, general and administrative 815,000 753,000 Amortization of capitalized software development costs 144,000 Research and development 531,000 327,000 Non-cash restructuring charge 2,058,000 ----------- ---------- 4,808,000 4,028,000 ----------- ----------- Loss from operations (1,994,000) (480,000) ----------- ----------- Other income (expense): Interest, net (23,000) (30,000) Settlement of license agreements 234,000 Loss on conversion of convertible debt (204,000) Other (1,000) ----------- ----------- (23,000) (1,000) ----------- ----------- Net loss from continuing operations before provision for income taxes (2,017,000) (481,000) Provision for taxes ----------- ----------- Net loss from continuing operations (2,017,000) (481,000) Discontinued operations: Loss from operations of discontinued subsidiary (25,000) Gain on disposal of subsidiary 227,000 ----------- ----------- Net loss before extraordinary item (2,017,000) (279,000) Extraordinary gain on conversion of notes payable into common stock 209,000 ----------- ----------- Net loss $(2,017,000) $ (70,000) =========== =========== Primary loss per common share from continuing operations $(0.11) $(0.03) =========== =========== Primary loss per common share before extraordinary item $(0.11) $(0.02) =========== =========== Primary loss per common share $(0.11) $(0.00) =========== =========== Weighted average common shares outstanding 19,017,000 15,612,000 ========================================================================================
See accompanying notes to consolidated condensed financial statements. 2 PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)
============================================================================================== Nine Months ended March 31, 1996 1995 - ---------------------------------------------------------------------------------------------- Revenues: Sales of products $ 6,436,000 $ 9,755,000 Engineering fees 1,444,000 716,000 License fees and royalties 164,000 187,000 ----------- ----------- 8,044,000 10,658,000 ----------- ----------- Costs and expenses: Cost of products sold 5,700,000 8,853,000 Selling, general and administrative 2,381,000 2,430,000 Amortization of capitalized software development costs 230,000 374,000 Research and development 1,468,000 866,000 Non-cash restructuring charge 2,058,000 ----------- ----------- 11,837,000 12,523,000 ----------- ----------- Loss from operations (3,793,000) (1,865,000) ----------- ----------- Other income (expense): Interest, net (76,000) (96,000) Settlement of license agreements 234,000 Loss on conversion of convertible debt (204,000) Other 22,000 ----------- ----------- (76,000) (44,000) ----------- ----------- Net loss from continuing operations before provision for income taxes (3,869,000) (1,909,000) Provision for taxes 4,000 4,000 ----------- ----------- Net loss from continuing operations (3,873,000) (1,913,000) Discontinued operations: Loss from operations of discontinued subsidiary (71,000) Gain on disposal of subsidiary 227,000 ----------- ----------- Net loss before extraordinary item (3,873,000) (1,757,000) Extraordinary gain on conversion of accounts payable into common stock 116,000 Extraordinary gain on conversion of notes payable into common stock 209,000 ----------- ----------- Net loss $(3,757,000) $(1,548,000) =========== =========== Primary loss per common share from continuing operations $(0.22) $(0.14) =========== =========== Primary loss per common share before extraordinary item $(0.22) $(0.13) =========== =========== Primary loss per common share $(0.21) $(0.11) =========== =========== Weighted average common shares outstanding 18,129,000 14,166,000 ==============================================================================================
See accompanying notes to consolidated condensed financial statements. 3 PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (unaudited)
======================================================================================================= Nine months ended March 31, 1996 1995 - ------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(3,757,000) $(1,548,000) Adjustments to reconcile net loss to cash used by operating activities: Depreciation and amortization of equipment 88,000 96,000 Amortization of capitalized software development costs 230,000 374,000 Amortization of prepaid licenses and royalties 56,000 183,000 Non-cash restructuring charge 2,058,000 Extraordinary gain on conversion of accounts payable into common stock (116,000) Extraordinary gain on conversion of notes into common stock (209,000) Gain on disposal of subsidiary (227,000) Loss on conversion of convertible debt 204,000 Changes in assets and liabilities: Accounts receivable 181,000 29,000 Inventories (14,000) 492,000 Other current assets (122,000) 8,000 Accounts payable and accrued expenses 310,000 189,000 Deferred revenues 632,000 (43,000) ----------- ----------- NET CASH USED BY OPERATING ACTIVITIES (454,000) (452,000) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Prepaid licenses and royalties (162,000) (101,000) Capital expenditures (162,000) (63,000) ----------- ----------- NET CASH USED BY INVESTING ACTIVITIES (324,000) (164,000) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from sale of common stock 2,033,000 Proceeds from sale of common stock warrants 508,000 Proceeds from notes payable 135,000 736,000 Repayment of notes payable (177,000) (337,000) Proceeds from line-of-credit 255,000 Repayment of line-of-credit (374,000) Principal payments under capital lease obligations (11,000) (33,000) Net proceeds from exercise of stock options 116,000 Proceeds from shareholder loans 109,000 ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 2,369,000 591,000 ----------- ----------- Net decrease in cash 1,591,000 (25,000) Cash at the beginning of the period 322,000 153,000 ----------- ----------- Cash at the end of the period $ 1,913,000 $ 128,000 =========== =========== NON-CASH FINANCING ACTIVITIES: Conversion of accrued interest to principal on notes payable $ 21,000 $ 33,000 =========== =========== Conversion of accrued interest into common stock $ 12,000 $ 38,000 =========== =========== Conversion of notes payable into common stock $ 123,000 $ 1,186,000 =========== =========== Conversion of accounts payable into preferred stock $ 1,162,000 =========== Common stock exercised with accrued expenses $ 149,000 =========== Conversion of accounts payable and accrued expenses into common stock $ 272,000 =========== Fixed assets acquired under capital leases $ 28,000 $ 7,000 =========== =========== Consulting fees paid with common stock $ 5,000 =========== Conversion of preferred stock into common stock $ 93,000 =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 33,000 $ 21,000 =========== =========== Cash paid during the period for income taxes $ 4,000 $ 4,000 =========== =========== =======================================================================================================
See accompanying notes to consolidated condensed financial statements 4 PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) NOTE 1 - PRINCIPLES OF CONSOLIDATION The accompanying consolidated condensed financial statements of Personal Computer Products, Inc. and Subsidiaries (the "Company" or "PCPI") have not been audited. These financial statements reflect 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 periods presented. These financial statements should be read in conjunction with the Company's audited financial statements which are included in the Company's annual report on Form 10-KSB for the year ended June 30, 1995 and the Company's Form 10-QSB for the quarters ended September 30, 1995 and December 31,1995 filed with the Securities and Exchange Commission. Interim operating results are not necessarily indicative of operating results for the full year. NOTE 2- RECLASSIFICATIONS Certain amounts in the Consolidated Condensed Statement of Operations for the three and nine month periods ended March 31, 1995 have been reclassified to conform to the current year presentation. NOTE 3- INVENTORIES Inventories at March 31, 1996 consisted primarily of finished goods in the aggregate amount of $331,000. NOTE 4- NON-CASH RESTRUCTURING CHARGE During the quarter ended March 31, 1996, the Company reassessed its ability to market certain "older-technology" product lines. As a result, the Company took a one-time, non-cash write-down of $2,058,000 against capitalized software ($937,000), prepaid licenses and royalties ($583,000), inventories ($204,000) and certain pre-paid assets ($334,000) to reduce these assets to their net realizable value. NOTE 5- COMMON STOCK During the quarter ended March 31, 1996, the Company issued approximately 7,449,000 shares of its unregistered common stock in consideration for net cash proceeds of approximately $1,967,000 and the conversion of accrued expenses of approximately $261,000. NOTE 6- EVENTS SUBSEQUENT TO MARCH 31, 1996 Subsequent to March 31, 1996, the Company issued approximately 2,034,000 shares of its unregistered common stock in consideration for net cash proceeds of approximately $542,000 and the conversion of the notes payable aggregating $75,000. In April 1996, the Company paid in full the remaining $346,000 of its $700,000 note payable. 5 PERSONAL COMPUTER PRODUCTS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS RESULTS OF OPERATIONS The Company has been in a transition period, from older technology and products, to becoming a leading technology-based supplier of state-of-the-art printer controllers to OEM customers. The implementation of the strategy of the development of the new Adobe PostScript and HP-based (PCL) multi-function technology is beginning to show promising results. During the quarter ended March 31, 1996, Matsushita Electric Company, Ltd. (Panasonic) accepted the multi-function printer that the Company had been designing over the past eighteen months. The Company has been successful in attracting several major customers, with substantial resources and marketing capabilities, that desire to utilize the technologies of the Company which the Company has developed over the past few years. Current contracts to adapt the Company's software products to controllers that will be integrated with the hardware products of various OEM customers, include Integrated Device Technology, Inc. (IDT), Panasonic, Minolta Company, Ltd., and NEC Electronics, Inc. The Company recognized non-recurring engineering fees ("NRE") to adapt the Company's software products to controllers of its OEM customers of approximately $931,000 for the three months ended March 31, 1996 compared to $406,000 for the three month period ended March 31, 1995, an increase of 129%. For the nine month periods ended March 31, 1996 and 1995, the Company recognized NRE fees of approximately $1,444,000 and $716,000, respectively, an increase of 102%. PCPI's strategy has required the Company to alter its focus away from some of its traditional revenue sources and to make expenditures in support of these efforts. As a result, the Company's business continues to be in a significant transitional phase and there are important short-term operational and liquidity challenges. Accordingly, year-to-year financial comparisons may be of limited usefulness now and for the next several quarters due to these important changes in the Company's business. The Company had a net loss from continuing operations of $2,017,000 for the third quarter of fiscal 1996 (which included a one-time, non-cash restructuring charge of $2,058,000) compared to $481,000 for the third quarter of fiscal 1995. Total revenues were $2,814,000 for the third quarter of fiscal 1996 versus $3,548,000 for the third quarter of fiscal 1995. The Company had a net loss from continuing operations of $3,873,000 for the nine months ended March 31, 1996 compared to $1,913,000 for the nine months ended March 31, 1995. Total revenues were $8,044,000 for the nine months ended March 31, 1996 compared to $10,658,000 for the nine months ended March 31, 1995. REVENUES Sales of products from continuing operations were $1,720,000 for the third quarter of fiscal 1996 versus $3,137,000 for the third quarter of fiscal 1995. For the nine months ended March 31, 1996 and 1995 sales of products from continuing operations were $6,436,000 and $9,755,000, respectively. The Company's sales of products from continuing operations for the quarters ended March 31, 1996 and 1995 include Prima sales of $1,699,000 and $3,118,000, respectively. For the nine months ended March 31, 1996 and 1995 Prima's product sales were $6,378,000 and $9,239,000, respectively. Prima's business consists of product distribution and integration, including sales of its PDQ(TM) line of memory storage devices featuring SyQuest(TM) removable cartridge technology. The reduction in sales is attributed to reduced product availability by 6 SyQuest, a product transition by Prima that places less reliance on SyQuest's products and technologies and a shortage of working capital during the nine months ended March 31, 1996, all of which imposed limitations on Prima's operations. These reductions were partially offset by an increase in Prima's sales of PCMCIA-based memory products. The Company has been transitioning from older technology and products, to new technology-based printer controller products over the past two years. It is anticipated that certain of these new technology-based products can be distributed to Prima's customer base. Non-Prima sales of printer products and accessories during the nine months ended March 31, 1996 and 1995, which represents sales of these older technology based products, were $58,000 and $516,000. Product sales during the nine months ended March 31, 1995 include sales, to a single customer, of $231,000 of laser printer engines. During fiscal 1996, the Company performed work on engineering projects that were funded by OEM customers under non-recurring engineering contracts. NRE revenue for the quarters ended March 31, 1996 and 1995 was $931,000 and $406,000, respectively, which was recognized during the course of development based on the percentage of completion method. During the nine month periods ended March 31, 1996 and 1995, NRE revenues were approximately $1,444,000 and $716,000, respectively. Licensing and royalties for the three month period ended March 31, 1996 were $163,000 compared to $5,000 for the quarter ended March 31, 1995. During the nine month periods ended March 31, 1996 and 1995, such revenues were $164,000 and $187,000, respectively. In the past, licensing and royalty revenue have shown significant quarter-to-quarter fluctuations. With the exception of $160,000 recognized during the quarter ended March 31, 1996, the licensing and royalty revenues recognized during fiscal 1995 and the first nine months of fiscal 1996 were derived from "older-technology" based products. PCPI has submitted several proposals to prospective customers in order to develop Adobe PostScript-based controllers and other controllers based upon its ImageBase technology. While the Company has entered into some contracts with OEM customers for controller development, there can be no assurance that additional contracts will be obtained for the development of such controllers, or that the existing contracts will be completed, or that products will be shipped by the customer which may result in the generation of future royalty and license revenues or that these products, once generating royalties, will continue to do so. COST OF PRODUCTS SOLD Cost of products sold from continuing operations for the three months ended March 31, 1996 and 1995 was $1,404,000 and $2,804,000, respectively, representing a gross margin of 18.4% and 10.6%. Cost of products sold from continuing operations for the nine months ended March 31, 1996 and 1995 was $5,700,000 and $8,853,000 representing a gross margin of 11.4% and 9.2%. The change in the gross margin is attributed to a change in the product mix between the periods. Over the past year, there has been a continued decline in the margins and sales levels of old-technology based products and in Prima's SyQuest product lines. During the past nine months, sales of higher margin PCMCIA-based memory products through Prima have been increasing as a percentage of Prima's sales which has improved the margins during both the three and nine month periods ended March 31, 1996. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses from continuing operations for the third quarter of fiscal 1996 were $815,000 versus $753,000 for the third quarter of fiscal 1995. The increase is primarily the result of increased sales commissions to Nippo, Ltd. on NRE contracts due to an increase in the amount and timing of NRE payments received against active contracts and an increase in selling expenses in an attempt to stimulate technology and product sales. In 7 addition, the Company has reduced its administrative costs as the result of reductions in force due to attrition in personnel and its reductions in operating expenses related to the strategic direction of the Company. Selling, general and administrative expenses from continuing operations for the first nine months of fiscal 1996 were $2,381,000 versus $2,430,000 for the first nine months of fiscal 1995. The general decrease is attributed to lower sales commissions and reduced administrative costs during the first of quarter fiscal 1996 compared to the first quarter of fiscal 1995. These reductions were partially offset by the increase in selling expenses during the third quarter of fiscal 1996 noted above. NON-CASH RESTRUCTURING CHARGE During the quarter ended March 31, 1996, the Company reassessed its ability to market certain "older-technology" product lines. As a result, the Company took a one-time, non-cash write-down of $2,058,000 against capitalized software ($937,000), prepaid licenses and royalties ($583,000), inventories ($204,000) and certain pre-paid assets ($334,000) to reduce these assets to their net realizable value. RESEARCH AND DEVELOPMENT Research and development expenditures from continuing operations for the third quarter of fiscal 1996 were $531,000 versus $327,000 for the third quarter of fiscal 1995, an increase of 62.4%. Such expenses for the nine month periods ended March 31, 1996 and 1995 were approximately $1,468,000 and $866,000, respectively, an increase of 69.5%. These expenditures consist of engineering expenses associated with the development of controller technologies and designs for PCPI technology customers. OTHER INCOME AND LOSS Net interest expense from continuing operations was $23,000 for the quarter ended March 31, 1996 versus $30,000 for the quarter ended March 31, 1995. Net interest expense from continuing operations was $76,000 for the nine months ended March 31, 1996 versus $96,000 for the nine months ended March 31, 1995. Interest expenses were due to outstanding debt balances. The Company also recognized an extraordinary gain of $116,000 during the nine months ended March 31, 1996 on the conversion of notes and accounts payable into common stock. The extraordinary gain represents the difference in the aggregate conversion price of the shares issued and their market value at the date of conversion. DISCONTINUED OPERATIONS Effective March 24, 1995, the Company disposed of its ImageSoft subsidiary. Operations of ImageSoft had not been material to the consolidated operations of the Company. The Company's discontinued ImageSoft subsidiary (software distribution and publishing) had sales of approximately $30,000 and total operating expenses (cost of products sold and selling, general and administrative expenses) of $55,000 for the quarter ended March 31,1995. For the nine months ended March 31, 1995, ImageSoft had sales of approximately $93,000 and operating expenses of approximately $164,000. LIQUIDITY AND CAPITAL RESOURCES During the quarter ended March 31, 1996, PCPI's liquidity improved as the result of the $2,500,000 equity placement of its common stock. In addition, the conversion of over $3 million of outstanding debt and other liabilities into equity during fiscal 1996, 1995 and 1994 8 has also improved the Company's liquidity. At March 31, 1996, the Company had a negative working capital of $69,000 compared to a negative working capital of $649,000 as of June 30, 1995. During fiscal 1995 and through March 31, 1996, the Company had experienced operating difficulties due to its lack of working capital. The shift in focus toward Adobe co-development projects presents continuing liquidity problems because, in the short-term, these activities are net users of working capital. Although the Company has improved its cash and liquidity, adequate working capital is necessary to continue the Company's operations, develop its technology licensing business and to deliver the resulting products to contract customers in an efficient and timely manner. In addition, as noted above, while the Company has entered into several contracts with OEM customers for controller development, there can be no assurance that additional contracts will be obtained for the development of such controllers, or that the existing contracts will be completed, or that products will be shipped by the customer that will generate future royalty and license revenues or that once these products are being shipped by the Company's customers that they will continue to generate royalties. As of March 31, 1996, the unused portion of Prima's restricted line of credit was $333,000. PCPI has no material commitments for capital expenditures. 9 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - -------------------------- No reportable matter. ITEM 2. CHANGES IN SECURITIES - ------------------------------ None ITEM 3. DEFAULTS UPON SENIOR SECURITIES - ---------------------------------------- The Company's 5% convertible preferred stock (which ranks prior to the Company's 5% Series B Preferred Stock and common stock) and the Company's 5% Series B Preferred Stock (which ranks prior to the Company's common stock), carry cumulative dividends, when and as declared, at an annual rate of $50.00 and $500.00 per share, respectively. The aggregate amount of such dividends in arrears at March 31, 1996 was approximately $1,731,000 and $58,000, respectively. 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) Exhibits: None. (b) Reports on Form 8-K: 10 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PERSONAL COMPUTER PRODUCTS, INC. BY: ----------------------------------------- DATE: May 2, 1996 Harry J. Saal Chairman of the Board BY: ----------------------------------------- DATE: May 2, 1996 Edward W. Savarese Vice Chairman of the Board, President and Chief Executive Officer BY: ----------------------------------------- DATE: May 2, 1996 Ralph R. Barry Chief Financial Officer 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS JUN-30-1996 JUL-01-1995 MAR-31-1996 1,913 0 1,315 246 331 3,332 965 717 3,655 3,401 0 128 0 3,480 (3,354) 3,655 6,436 8,044 5,700 7,398 2,058 45 80 (3,869) 4 (3,873) 0 116 0 (3,757) (0.220) (0.210)
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