GERMANTOWN, Md.--(BUSINESS WIRE)--Dec. 5, 1997--ZMAX Corp.
(OTC:ZMAX) announced Friday its historical and pro forma financial
results for the nine months ended Sept. 30, 1997.
The pro forma gives effect to the pending merger and exchange
offer described in the company's Nov. 3, 1997 proxy statement
information.
The company recognized revenue of $451,291 and $512,041 respectively
for the quarter and nine months ended Sept. 30, 1997, as the company
initiated work on several new contracts. The third quarter net loss
was $1,146,415, or ($0.23) a share on 5,079,169 shares.
This represented an improvement and a reduction in losses from
($0.92) a share on 4,635,822 shares for the first half of 1997.
Reductions in one time costs and improvements in operating
efficiencies contributed to the improved results in the third
quarter.
The pending debt for equity exchange offer and merger will
improve the company's financial condition by eliminating long term
debt and increasing cash. Year to date pro forma net loss per share
reflecting the merger and exchange offer was ($0.63) on 8,158,479
shares, as compared to a historical net loss of ($1.06) on 5,079,169
for the same period.
"The pending recapitalization should further strengthen our
abilities to realize the additional opportunities from the Year 2000
Situation," stated Michael C. Higgins, president of ZMAX Corp.
The financial information presented should be read in conjunction
with the company's Proxy Statement of Nov. 3, 1997. The pro forma
financial information does not purport to represent what ZMAX's
results of operations or financial position actually would have been
had such transactions and events occurred on the dates specified, or
to project ZMAX's results of operations or financial position for any
future period or date.
The pro forma adjustments are based upon available information
and certain adjustments that the management of ZMAX believes are
reasonable. In the opinion of the management of ZMAX, all
adjustments have been made that are necessary to present the
unaudited pro forma financial data.
The pro forma adjustments reflect the exchange of the company's
convertible exchangeable subordinated debt for 1,210,000 shares of
common stock and warrants to purchase 1,210,000 of common stock as if
it occurred Jan. 1, 1997. The warrants are assumed to be fully
exercised at $7.00 a share with an additional 1,210,000 shares of
common stock issued.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor may there be any sale of these
securities in any state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
ZMAX Corp.'s wholly owned subsidiary, Century Services Inc.
(CSI) has developed the proprietary "VISION 2000(SM)" service which
provides an accurate, controlled, and verifiable solution for all
COBOL and PL/1 main programs, subprograms, copybooks, JCL, database
definitions and other software components requiring change to
accommodate the year 2000 dates.
The windows based "VISION 2000(SM)" software has demonstrated high
accuracy in identifying the lines of code directly or indirectly
impacted by date change.
After identification of the changes required, a suite of state of
the art automated conversion and test tools, including global updates
and a sophisticated "security lockout" feature assures comprehensive
change without modifying non-date-related fields and statements.
The VISION 2000(SM) service includes CSI's set of robust, secure,
technically effective and cost-efficient assessment, conversion and
unit test tools, along with a comprehensive management process and
on-site technical support.
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*T
ZMAX Corp.
(A Development Stage Company)
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of Sept. 30, 1997
Pro Forma
Exchange and New ZMAX After
Historical Merger Exchange and
Old ZMAX Adjustments Merger
-------------------------------------------------
Cash $ 1,511,465.94 $ 8,470,000.00 $ 9,981,465.94
Prepaid expenses
and other
current assets $ 524,257.58 $ - $ 524,257.58
-------------------------------------------------
Total current assets $ 2,035,723.52 $ 8,470,000.00 $ 10,505,723.52
Property and
equipment $ 286,936.60 $ - $ 286,936.60
Intangible assets $ 4,750,647.00 $ - $ 4,750,647.00
Deferred financing
costs $ 1,038,270.00 $ (1,038,270.00) $ -
Other Assets $ 986,067.91 $ (986,067.91) $ (0.00)
-------------------------------------------------
Total assets $ 9,097,645.03 $ 6,445,662.09 $ 15,543,307.12
Accounts payable and
accrued expenses $ 1,416,136.78 $ 513,932.09 $ 1,930,068.87
Contract Deposits $ 1,000,000.00 $ - $ 1,000,000.00
Current portion of
long-term debt $ 539,541.00 $ - $ 539,541.00
-------------------------------------------------
Total current
liabilities $ 2,955,677.78 $ 513,932.09 $ 3,469,609.87
Exchangeable
subordinated
debentures $ 5,500,000.00 $ (5,500,000.00) $ -
Deferred tax
liability $ 426,200.00 $ - $ 426,200.00
-------------------------------------------------
Total liabilities $ 8,881,877.78 $ (4,986,067.91) $ 3,895,809.87
Preferred stock $ - $ -
Common stock $ 6,946.00 $ 2,420.00 $ 9,366.00
Additional paid in
capital $ 17,110,565.00 $ 18,799,310.00 $ 35,909,875.00
Retained earnings $(16,901,743.75 $ (7,370,000.00) $(24,271,743.75)
-------------------------------------------------
Total equity $ 215,767.25 $ 11,431,730.00 $ 11,647,497.25
-------------------------------------------------
Total liabilities
equity $ 9,097,645.03 $ 6,445,662.09 $ 15,543,307.12
ZMAX Corp.
(A Development Stage Company)
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended Sept. 30, 1997
Pro Forma
Exchange New ZMAX
Historical and Merger After Exchange
Old ZMAX Adjustments and Merger
-------------------------------------------------
Revenues $ 512,040.83 $ - $ 512,040.83
Operating expenses:
Cost of revenues $ (283,331.84) $ - $ (283,331.84)
General and
administrative $ (3,069,598.35) $ - $ (3,069,598.35)
Selling and
marketing $ (896,463.52) $ - $ (896,463.52)
Amortization and
depreciation $ (730,225.13) $ - $ (730,225.13)
-------------------------------------------------
Loss from operations $ (4,467,578.01) $ - $ (4,467,578.01)
Other income (expense):
Interest income $ 121,893.26 $ - $ 121,893.26
Interest expense $ (1,228,695.00) $ 238,647.00 $ (990,048.00)
Other $ 101,103.00 $ - $ 101,103.00
-------------------------------------------------
Net loss before
income tax benefit $ (5,473,276.75) $ 238,647.00 $ (5,234,629.75)
Income tax benefit $ 78,288.00 $ - $ 78,288.00
-------------------------------------------------
Net loss $ (5,394,988.75) $ 238,647.00 $ (5,156,341.75)
-------------------------------------------------
Net loss per common
share $ (1.06) $ (0.63)
--------------- ---------------
Shares used in
computing net
loss per share 5,079,169.00 8,158,479.00
*T
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ZMAX Corp. trades on the OTC Electronic Bulletin Board under the
symbol of "ZMAX" and on the Frankfurt and Berlin Stock Exchanges under
the symbol of "ZMX."
CONTACT:
For investor information:
Investor Communications Co., 800/416-0811 or 800/547-0443
or
For media information:
Michael Baybak & Co. Inc.
Rhoda Moore, 818/542-6880
KEYWORD: MARYLAND
BW1276 DEC 05,1997 |
