PART II- OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
(c) On April 14, 1998, the Company sold 6% Convertible Debentures, due April,
2000, in the aggregate principal amount of $1,000,000 and issued warrants to
purchase 301,228 shares of Common Stock for gross proceeds of
13
$1,000,000 as follows: Canadian Advantage LP ($275,000); Dominion Capital Fund
($275,000); Fetu Holdings ($250,000); and Livingston Asset Management
($200,000). Each of the above claim the status as accredited investors as
organizations described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities purchased, with total
assets in excess of $5,000,000. Each purchased its debentures and warrants for
investment. Canadian Advantage LP ("Canadian") was issued warrants to purchase
16,500 shares of Common Stock at $1.50 per share through April 14, 2000 and
warrants to purchase 66,338 shares of Common Stock at $.456 per share through
April 14, 2000; Dominion Capital Fund ("Dominion") was issued a like number of
identical warrants; Fetu Holdings ("Fetu") was issued like warrants to purchase
15,000 shares at $1.50 and 60,307 shares at $.456, and Livingston Asset
Management ("Livingston") was issued like warrants to purchase 12,000 shares at
$1.50 and 48,245 shares at $.456. On May 14, 1998, an aggregate of $125,000 of
Debentures, plus interest, were converted into 111,270 shares of Common Stock as
follows: Dominion and Canadian each converted $34,375 in principal plus interest
into 30,599 shares of Common Stock, Fetu converted $31,250 in principal plus
interest into 27,818 shares of Common Stock and Livingston converted $25,000 in
principal plus interest into 22,254 shares of Common Stock. On May 15, 1998, an
aggregate of $175,000 of Debentures plus interest were converted into 154,822
shares of Common Stock as follows: Dominion and Canadian each converted $48,125
in principal plus interest into 42,576 shares of Common Stock, Fetu converted
$43,750 in principal plus interest into 38,706 shares of Common Stock and
Livingston converted $35,000 in principal plus interest into 30,964 shares of
Common Stock. On July 8, 1998, an aggregate of $300,000 of such Debentures were
converted into 468,567 shares of common stock as follows: Dominion and Canadian
each converted $82,500 of principal plus interest into 128,856 shares of Common
Stock, Fetu converted $75,000 of principal plus interest into 117,142 shares of
Common Stock and Livingston converted $60,000 plus interest into 93,713 shares
of Common Stock.
The Debentures, the warrants and the Common Stock issued on conversion of the
Debentures were issued in reliance upon the exemption set forth in Section 4
(2) of the Act and Rule 506 thereunder. Such securities were purchased for
investment and not with a view to the public distribution thereof. The common
stock issued upon conversion of the Debentures were further issued in reliance
on Section 3 (a) (9) of the Act. In both the issuance of the Debentures and the
Common Stock the certificates representing such securities bear a legend
preventing resale in the absence of registration with the Commission or an
exemption therefrom.
Item 6. Exhibits and Reports on Form 8-K
/a/ Financial Data Schedule
/b/ Reports on Form 8-K.
No Reports on Form 8-K were filed by the Company during the three-month
period ended April 30, 1998.
14
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TRANSFORMATION PROCESSING INC.
Date September 8, 1998 /s/ John McGee
-------------------- -----------------------------------
John McGee, Chief Financial Officer
15
ÿTYPE:ÿÿEX-27
ÿSEQUENCE:ÿÿ2
ÿDESCRIPTION:ÿÿEXHIBIT 27
ÿARTICLE:ÿÿ 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS FILED AS A PART OF THE REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT ON FORM 10-QSB.
ÿPERIODÿTYPE:ÿÿ 9-MOS
ÿFISCALÿYEARÿEND:ÿÿ JUL-31-1998
ÿPERIODÿEND:ÿÿ APR-30-1998
ÿCASH:ÿÿ 274,206
ÿSECURITIES:ÿÿ 0
ÿRECEIVABLES:ÿÿ 339,247
ÿALLOWANCES:ÿÿ 0
ÿINVENTORY:ÿÿ 0
ÿCURRENTÿASSETS:ÿÿ 618,405
ÿPP&E:ÿÿ 966,777
ÿDEPRECIATION:ÿÿ 359,727
ÿTOTALÿASSETS:ÿÿ 1,397,004
ÿCURRENTÿLIABILITIES:ÿÿ 1,459,492
ÿBONDS:ÿÿ 16,729
ÿPREFERREDÿMANDATORY:ÿÿ 0
ÿPREFERRED:ÿÿ 0
ÿCOMMON:ÿÿ 15,299
ÿOTHERÿSE:ÿÿ (94,516)
ÿTOTALÿLIABILITYÿANDÿEQUITY:ÿÿ 1,397,004
ÿSALES:ÿÿ 0
ÿTOTALÿREVENUES:ÿÿ 415,345
ÿCGS:ÿÿ 0
ÿTOTALÿCOSTS:ÿÿ 2,341,630
ÿOTHERÿEXPENSES:ÿÿ 0
ÿLOSSÿPROVISION:ÿÿ 0
ÿINTERESTÿEXPENSE:ÿÿ (207,314)
ÿINCOMEÿPRETAX:ÿÿ (2,133,599)
ÿINCOMEÿTAX:ÿÿ 0
ÿINCOMEÿCONTINUING:ÿÿ (2,133,599)
ÿDISCONTINUED:ÿÿ 0
ÿEXTRAORDINARY:ÿÿ 0
ÿCHANGES:ÿÿ 0
ÿNETÿINCOME:ÿÿ (2,133,599)
ÿEPSÿPRIMARY:ÿÿ (0.15)
ÿEPSÿDILUTED:ÿÿ (0.15)
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