SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 10-Q ------------- [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1995 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 0-11254 COPYTELE, INC. - --------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 11-2622630 - -------------------------------- -------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification Incorporation or Organization) No.) 900 Walt Whitman Road Huntington Station, NY 11746 (516) 549-5900 - --------------------------------------------------------------------------- (Address, Including Zip Code, and Telephone Number, Including Area Code of Registrant's Principal Executive Offices) N/A - --------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Indicate by check mark 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 requirements for the past 90 days. Yes [x] No [_] On June 2, 1995, the registrant had outstanding 25,231,403 shares of Common Stock, par value $.01 per share. TABLE OF CONTENTS ----------------- Part I. FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Balance Sheets (Unaudited) as of April 30, 1995 and October 31, 1994 Condensed Statements of Operations (Unaudited) for the six-months ended April 30, 1995 and April 30, 1994, and for the period from November 5, 1982 (Inception) through April 30, 1995 Condensed Statements of Operations (Unaudited) for the three-months ended April 30, 1995 and April 30, 1994 Condensed Statement of Shareholders' Equity (Unaudited) for the period from November 5, 1982 (Inception) through April 30, 1995 Condensed Statements of Cash Flows (Unaudited) for the six-months ended April 30, 1995 and April 30, 1994, and for the period from November 5, 1982 (Inception) through April 30, 1995 Condensed Statements of Cash Flows (Unaudited) for the three-months ended April 30, 1995 and April 30, 1994 Notes to Condensed Financial Statements (Unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. Signatures. Part I - FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements. --------------------- COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------
April 30, October 31, 1995 1994 ----------- ------------- ASSETS ------ CURRENT ASSETS: Cash (including cash equivalents and interest bearing account of $6,848,924 and $6,163,435, respectively) $ 6,875,618 $ 6,244,801 Accrued interest receivable 17,273 17,041 Prepaid expenses 36,038 45,994 -------------- -------------- 6,928,929 6,307,836 PROPERTY AND EQUIPMENT (net of accumulated depreciation and amortization of $658,030 and $628,668, respectively) 198,500 207,778 OTHER ASSETS 103,691 98,718 DEFERRED TAX BENEFITS (net of valuation allowance of $14,253,507 and $13,458,155, respectively) - - -------------- -------------- $ 7,231,120 $ 6,614,332 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable $ 274,539 $ 163,402 Accrued liabilites 33,825 35,697 ------------ ----------- 308,364 199,099 ------------ ------------ SHAREHOLDERS' EQUITY: Preferred stock, par value $100 per share; authorized 500,000 shares; no shares outstanding - - Common stock, par value $.01 per share; authorized 120,000,000 shares; outstanding 25,168,403 and 24,837,403 shares, respectively 251,684 248,374 Additional paid-in capital 28,322,730 26,487,930 Accumulated (deficit) during development stage (21,651,658) (20,321,071) ------------ ------------ 6,922,756 6,415,233 ------------ ------------ $ 7,231,120 $ 6,614,332 ============ ============
The accompanying notes to condensed financial statements are an integral part of these balance sheets. COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------
For the six months ended For the Period from April 30, November 5, 1982 -------------------------------- (inception) through 1995 1994 April 30, 1995 -------------- ------------ ------------------- SALES $ - $ - $ - -------------- -------------- -------------- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including research and development expenses of approximately $960,000, $1,540,000 and $15,492,000, respectively 1,479,329 2,038,156 24,109,646 -------------- -------------- -------------- INTEREST INCOME 148,742 99,880 2,457,988 -------------- -------------- -------------- NET (LOSS) ($ 1,330,587) ($ 1,938,276) ($ 21,651,658) ============== =============== ============== NET (LOSS) PER SHARE OF COMMON STOCK ($0.05) ($0.08) ($0.98) ============== =============== ============== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 24,916,707 24,582,144 22,015,251 ============== =============== ==============
The accompanying notes to condensed financial statements are an integral part of these statements. COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) ----------------------------------------------
For the three months ended April 30, -------------------------------- 1995 1994 ------------- ------------- SALES $ - $ - -------------- ------------- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including research and development expenses of approximately $481,000, and $675,000, respectively 738,778 848,933 -------------- ------------- INTEREST INCOME 79,477 48,551 -------------- ------------- NET (LOSS) ($ 659,301) ($ 800,382) ============== ============= NET (LOSS) PER SHARE OF COMMON STOCK ($0.03) ($0.03) ============== ============= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 24,998,685 24,621,135 ============== =============
The accompanying notes to condensed financial statements are an integral part of these statements. COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY ------------------------------------------- FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION) ------------------------------------------------ THROUGH APRIL 30, 1995 (UNAUDITED) ----------------------------------
Accumulated (Deficit) Common Stock Additional During ---------------------------- Paid-in Development Shares Par Value Capital Stage ------------ ------------ ------------- ------------- BALANCE, November 5, 1982 (inception) - $ - $ - $ - Sale of common stock, at par, to incorporators on November 8, 1982 1,470,000 14,700 - - Sale of common stock, at $10 per share, primarily to officers and employees from November 9, 1982 to November 30, 1982 390,000 3,900 35,100 - Sale of common stock, at $2 per share, in private offering from January 24, 1983 to March 28, 1983 250,000 2,500 497,500 - Sale of common stock, at $10 per share, in public offering on October 6, 1983, net of underwriting discounts of $1 per share 690,000 6,900 6,203,100 - Sale of 60,000 warrants to representative of underwriters, at $.001 each, in conjunction with public offering - - 60 - Costs incurred in conjunction with private and public offerings - - (362,030) - Common stock issued, at $12 per share, upon exercise of 57,200 warrants from February 5, 1985 to October 16, 1985, net of registration costs 57,200 572 630,845 - Proceeds from sales of common stock by individuals from January 29, 1985 to October 4, 1985 under agreements with the Company, net of costs incurred by the Company - - 298,745 - Restatement as of October 31, 1985 for three-for-one stock split 5,714,400 57,144 (57,144) - Common stock issued, at $4 per share, upon exercise of 2,800 warrants in December 1985 8,400 84 33,516 - Sale of common stock, at market, to officers on January 9, 1987 and April 22, 1987 and to members of their immediate families on July 28, 1987 67,350 674 861,726 - Restatement as of July 31, 1987 for five-for-four stock split 2,161,735 21,617 (21,617) - Fractional share payments in conjunction with five-for-four stock split - - (1,345) - Sale of common stock, at market, to members of officers' immediate families from September 10, 1987 to December 4, 1990 and to officers on October 29, 1987 and February 26, 1989 628,040 6,280 6,124,031 - Sale of common stock, at market, to senior level personnel on February 26, 1989 29,850 299 499,689 -
Continued NYFS11...:\95\38995\0001\2579\TBL6085E.440 COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY ------------------------------------------- FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION) ------------------------------------------------ THROUGH APRIL 30, 1995 (UNAUDITED) ---------------------------------- Continued ---------
Accumulated (Deficit) Common Stock Additional During ---------------------------- Paid-in Development Shares Par Value Capital Stage ------------ ------------ ------------- ------------- Sale of common stock, at market, to unrelated party on February 26, 1989 amended on March 10, 1989 35,820 358 599,627 - Restatement as of January 31, 1991 for two-for-one stock split 11,502,795 115,028 (115,028) - Sale of common stock, at market, to members of officers' immediate families from April 26, 1991 to October 27, 1992 261,453 2,614 2,788,311 - Common stock issued upon exercise of warrants by members of officers' immediate families in September 1993, July 1994 and February 1995 358,220 3,582 1,698,598 - Common stock issued upon exercise of stock options from December 16, 1992 to April 27, 1995 under stock option plans, net of registration costs 1,543,140 15,432 8,609,046 - Accumulated (deficit) during development stage - - - (21,651,658) ----------- ----------- ------------ ------------ BALANCE, April 30, 1995 25,168,403 $ 251,684 $ 28,322,730 ($ 21,651,658) =========== =========== ============ ============
The accompanying notes to condensed financial statements are an integral part of this statement. COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------
For the six months ended For the Period from April 30, November 5, 1982 -------------------------------- (inception) through 1995 1994 April 30, 1995 -------------- ------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers, employees and consultants ($ 1,340,607) ($ 2,016,817) ($ 23,284,602) Interest received 148,510 ( 100,332) 2,440,715 ------------ ------------- ------------- Net cash (used in) operating activities ( 1,192,097) ( 1,916,485) ( 20,843,887) ------------ ------------- ------------- CASH FLOWS FOR INVESTING ACTIVITIES: Payments for purchases of property and equipment ( 15,196) ( 36,794) ( 854,909) Disbursements to acquire certificates of deposit and corporate notes and bonds - - ( 12,075,191) Proceeds from maturities of investments - - 12,075,191 ------------ ------------- ------------- Net cash (used in) investing activities ( 15,196) ( 36,794) ( 854,909) ------------ ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sales of common stock and warrants, net of underwriting discounts of $690,000 related to initial public offering in October 1983 - - 17,647,369 Proceeds from exercise of stock options and warrants, net of registration disbursements 1,838,110 466,419 10,991,675 Proceeds from sales of common stock by individuals under agreements with the Company, net of disbursements made by the Company - - 298,745 Disbursements made in conjunction with sales of stock - - ( 362,030) Fractional share payments in conjunction with stock split - - ( 1,345) ------------ ------------- ------------- Net cash provided by financing activities 1,838,110 466,419 28,574,414 ------------ ------------- ------------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 630,817 ( 1,486,860) 6,875,618 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,244,801 8,317,010 - ------------ ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,875,618 $ 6,830,150 $ 6,875,618 ============ ============= =============
Continued NYFS11...:\95\38995\0001\2579\TBL6085K.470 COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ---------------------------------------------- Continued ---------
For the six months ended For the Period from April 30, November 5, 1982 -------------------------------- (inception) through 1995 1994 April 30, 1995 -------------- ------------- ------------------- RECONCILIATION OF NET (LOSS) TO NET CASH (USED IN) OPERATING ACTIVITIES: Net (loss) ($ 1,330,587) ($ 1,938,276) ($ 21,651,658) Depreciation and amortization 30,128 26,929 662,671 (Increase) Decrease in accrued interest receivable ( 232) 452 ( 17,273) (Increase) Decrease in prepaid expenses 9,956 19,985 ( 36,038) Decrease (Increase) in other assets ( 4,973) 780 ( 103,691) Increase (Decrease) in accounts payable and accrued liabilities related to operating activities 103,611 ( 26,355) 302,102 ------------ ------------ ------------- Net cash (used in) operating activities ( $ 1,192,097) ( $ 1,916,485) ( $ 20,843,887) ============ ============ =============
The accompanying notes to condensed financial statements are an integral part of these statements COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------
For the three months ended April 30, ---------------------------------- 1995 1994 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers, employees and consultants ($ 713,014) ($ 1,010,066) Interest received 84,388 ( 48,124) ------------ ------------ Net cash (used in) operating activities ( 628,626) ( 961,942) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Payments for purchases of property and equipment ( 3,117) ( 22,955) ------------ ------------ Net cash (used in) investing activities ( 3,117) ( 22,955) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options and warrants, net of registration disbursements 1,838,110 447,500 ------------ ------------ Net cash provided by financing activities 1,838,110 447,500 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,206,367 ( 537,397) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,669,251 7,367,547 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,875,618 $ 6,830,150 ============ ============ RECONCILIATION OF NET (LOSS) TO NET CASH (USED IN) OPERATING ACTIVITIES: Net (loss) ($ 659,301) ($ 800,382) Depreciation and amortization 15,407 13,950 (Increase) Decrease in accrued interest receivable 4,911 ( 427) (Increase) Decrease in prepaid expenses ( 2,421) 5,121 Decrease (Increase) in other assets 482 - Increase (Decrease) in accounts payable and accrued liabilities related to operating activities 12,296 ( 180,204) ----------- ------------ Net cash (used in) operating activities ($ 628,626) ($ 961,942) =========== ============
The accompanying notes to condensed financial statements are an integral part of these statements. NYFS11...:\95\38995\0001\2579\TBL6085M.180 COPYTELE, INC. -------------- (Development Stage Enterprise) ------------------------------ NOTES TO CONDENSED FINANCIAL STATEMENTS --------------------------------------- APRIL 30, 1995 (UNAUDITED) -------------------------- (1) Summary of significant accounting policies and ---------------------------------------------- other disclosures: ------------------ Reference is made to the October 31, 1994 audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1994, for more extensive disclosures than contained in these condensed financial statements. The information for the three and six month periods ended April 30, 1995 and 1994 and the period from November 5, 1982 (inception) through April 30, 1995 is unaudited, but in the opinion of the Company, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results of operations for such periods have been included. The results of operations for interim periods may not necessarily reflect the annual operations of the Company. On March 28, 1995, the Company entered into a Joint Venture Contract with Shanghai Electronic Components Corp. providing for the formation of a joint venture in China having a 20 year duration for the development, manufacture and marketing of multi- functional telecommunication products utilizing the Company's flat panel and associated technology. The Company owns a 55% interest in Shanghai CopyTele Electronics Co., Ltd., the joint venture company. The Company's initial capital contribution will consist of both cash and certain technology that has been licensed by the Company to the joint venture pursuant to a Technology Licensing Agreement entered into on the same date as the Joint Venture Contract. Reference is made to the Management's Discussion and Analysis of Financial Condition and Results of Operations section for further discussion involving this joint venture arrangement. The Company invests principally in short term highly liquid financial instruments with original maturities of less than three months, which have been classified as cash equivalents in the accompanying condensed balance sheets. The cost of these investments approximates market value. The Company has adopted all recently issued accounting standards which have a material impact on its condensed financial statements. (2) Stock option plans: ------------------- Information regarding the Company's stock option plan, adopted by the Board of Directors on April 1, 1987 (the "1987 Plan"), from November 1, 1994 to April 30, 1995, after adjustments for applicable stock splits, is as follows:
Range of Option Shares Price Per Share ------ --------------- Shares under option at October 31, 1994 1,687,860 $ 3.88 - $13.88 Exercised (120,000) $ 3.88 - $ 5.50 Cancelled (122,800) $ 5.50 - $ 6.50 --------- Shares under option at April 30, 1995 1,445,060 $ 3.88 - $13.88 ========= ===============
The exercise price with respect to all of the options granted under the 1987 Plan from its inception was at least equal to the fair market value of the underlying common stock of the Company (the "Common Stock") on the date of grant. As of April 30, 1995, all of the options to purchase shares of Common Stock granted and outstanding under the 1987 Plan were exercisable. Upon the approval of the 1993 Stock Option Plan (the "1993 Plan") by the Company's shareholders in July 1993, which had been adopted by the Board of Directors on April 28, 1993, the 1987 Plan was terminated with respect to the grant of future options. During May 1995, the Company received proceeds aggregating approximately $220,000 relating to the exercise of options to purchase 40,000 shares of Common Stock pursuant to the 1987 Plan. Information regarding the 1993 Plan from November 1, 1994 to April 30, 1995 is as follows:
Range of Option Shares Price Per Share ------ --------------- Shares under option at October 31, 1994 2,231,000 $ 4.88 - $17.00 Granted 825,000 $ 4.88 - $ 6.74 Exercised (157,000) $ 4.88 - $ 5.63 Cancelled (60,000) $ 5.63 - $11.50 --------- Shares under option at April 30, 1995 2,839,000 $ 4.88 - $17.00 ========= ===============
The exercise price with respect to all of the options granted under the 1993 Plan from its inception was at least equal to the fair market value of the underlying Common Stock on the grant date. As of April 30, 1995, 2,039,000 of the options to purchase shares of common stock granted and outstanding under the 1993 Plan were exercisable. At that date, 4,000 options were available for future grants under the 1993 Plan. On May 3, 1995, the Stock Option Committee granted options to purchase an aggregate of 1,585,000 shares of Common Stock under the 1993 Plan. The grants are subject to shareholder approval of an amendment to the 1993 Plan to increase the number of shares of Common Stock available for issuance pursuant to grants under the 1993 Plan from 3,000,000 to 7,000,000. If the amendments are not approved, the grants will become null and void. The exercise price, which was $6.625 per share, was at least equal to the fair market value of the underlying Common Stock on the date of grant. As of June 2, 1995, 2,039,000 of the options to purchase shares of Common Stock granted and outstanding under the 1993 Plan were exercisable. At that date, 4,000 options were available for future grants under the 1993 Plan. If the Company's shareholders approve the aforementioned amendment, 2,419,000 shares of Common Stock will be available for issuance pursuant to grants under the 1993 Plan based upon the number of shares granted to date. During May 1995, the Company received proceeds aggregating approximately $129,375 relating to the exercise of options to purchase 23,000 shares of common stock pursuant to the 1993 Plan. (3) Warrants to purchase common stock: ---------------------------------- Information from November 1, 1994 to April 30, 1995 regarding warrants previously issued by the Company, primarily to members of the immediate families of its Chairman of the Board and its President in conjunction with the sale of its common stock, after adjustments for anti-dilutive provisions, is as follows:
Current Weighted Average Exercise Shares Price Per Share ------ ----------------- Shares covered by warrants at October 31, 1994 669,333 $7.15 Warrants exercised (54,000) $6.12 Warrants expired (87,150) $6.16 ------- Shares covered by warrants at April 30, 1995 528,183 $7.34 ======= =====
The exercise price of all of the warrants was at least equal to the fair market value of the underlying Common Stock on the date of issuance of such warrants. As of April 30, 1995, all of the warrants to purchase shares of Common Stock issued and outstanding were exercisable. Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations. ------------------------------------ The Company, which is a development stage enterprise, was incorporated on November 5, 1982 and has had no revenues to support its operations since its inception. The Company's principal activities presently relate to a Joint Venture with Shanghai Electronic Components Corp. ("S.E.C.C.") of Shanghai, China. It is presently contemplated that the Joint Venture, in conjunction with the Company and S.E.C.C., will develop, manufacture and market products worldwide in the telecommunications field. There is no assurance, and the Company is not able to predict, if and when marketable telecommunications products incorporating the Company's flat panel technology will be developed or produced. Even if the Company were to produce marketable products, directly or through the Joint Venture, there is no assurance that the Company will generate revenues in the future, will have sufficient revenues to generate profit or that other products will not be produced by other companies that will render the products of the Company or the Joint Venture obsolete. In reviewing Management's Discussion and Analysis of Financial Condition and Results of Operations, reference is made to the Company's Condensed Financial Statements and the notes thereto. Results of Operations - --------------------- Selling, general and administrative expenses for the six and three month periods ended April 30, 1995 and 1994 and for the period from November 5, 1982 (inception) through April 30, 1995 were approximately $1,479,000, $2,038,000, $739,000, $849,000 and $24,110,000, respectively. These amounts include research, development and tooling costs of approximately $960,000, $1,540,000, $481,000, $675,000 and $15,492,000, respectively, as well as normal operating expenses. The decrease in selling, general and administrative expenses during the six and three months ended April 30, 1995 as compared to the same periods ended in 1994 resulted primarily from decreases in engineering supplies expenditures necessitated by the present phase of the Company's development program and related activities. Professional fees, especially patent application preparation and filing fees, decreased during the fiscal 1995 periods, offset by an increae in legal fees, associated with the Joint Venture, during the three months ended April 30, 1995. Since November 1985, the Company's Chairman of the Board and its President have waived salary and related pension benefits for an undetermined period of time. Four other individuals, including a former officer and senior level personnel, waived salary and related pension benefits from January 1987 through December 1990. Commencing in January 1991, these four individuals waived such rights for an undetermined period of time and they did not receive salary or related pension benefits through December 1992. The Company's Chairman of the Board, its President and the three senior level personnel (exclusive of the former officer) continued to waive such rights commencing in January 1993 for an undetermined period of time. One additional employee is also currently waiving such salary and benefit rights for an undetermined period of time. The increase in interest income during both the six and three months ended April 30, 1995 as compared to the same periods ended in 1994 primarily resulted from an increase in interest rates available for investment. Funds available for investment during the six and three month periods ended April 30, 1995 and 1994, on a monthly weighted average basis, were approximately $6,100,000, $7,400,000, $6,300,000 and $7,100,000, respectively. The investment instruments selected by the Company are principally money market accounts, treasury bills and commercial paper. The Company has adopted all recently issued accounting standards which have a material impact on its condensed financial statements. Liquidity and Capital Resources - ------------------------------- Since its inception, the Company has met its liquidity and capital expenditure needs primarily from the proceeds of the sales of Common Stock in the initial public offering, in private placements, upon exercise of warrants issued in connection with the private placements and public offering, and upon exercise of stock options pursuant to the 1987 Plan and the 1993 Plan. During May 1995, the Company received additional proceeds aggregating approximately $220,000 relating to the exercise of options to purchase 40,000 shares of Common Stock under the 1987 Plan. Also, during May 1995 the Company received additional proceeds aggregating approximately $129,375 relating to the exercise of options to purchase 23,000 shares of Common Stock under the 1993 Plan. The Company believes that even without sales it will have sufficient funds into the first quarter of fiscal 1997 to maintain its present level of development efforts, and to make its initial capital contributions, in installments, to the Joint Venture of approximately $1.2 million. The Company anticipates that it may require additional funds in order to participate in the Joint Venture following its initial capital contributions and to continue its research and development activities. The Company's estimated funding capacity indicated above assumes, although there is no assurance, that the waiver of salary and pension benefits by the Chairman of the Board, the President and senior level personnel will continue. The National Association of Securities Dealers, Inc. ("NASD") requires that the Company maintain a minimum of $4 million of net tangible assets to maintain its NASDAQ - NMS listing. The Company anticipates that it will seek additional sources of funding, when necessary, in order to satisfy the NASD requirements. There can be no assurance that adequate funds will be available to satisfy the Company's Joint Venture and NASD funding requirements or that, if available, such funds will be available on terms and conditions favorable to the Company. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-K. The Company filed a Report on Form 8-K, dated March 28, 1995, which included the following: a Joint Venture Contract, dated March 28, 1995, by and between Shanghai Electronic Components Corp. and CopyTele, Inc.; a Technology License Agreement, dated March 28, 1995, by and between Shanghai CopyTele Electronics Co., Ltd. and CopyTele, Inc.; and a copy of a Press Release issued by the Company on the same date. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CopyTele, Inc. /s/ Denis A. Krusos ------------------------------ Denis A. Krusos Chairman of the Board, Chief Executive Officer and Director (Principal June 8, 1995 Executive Officer) /s/ Frank J. DiSanto ------------------------------ Frank J. DiSanto June 8, 1995 President and Director /s/ Gerald J. Bentivenga ------------------------------ Gerald J. Bentivegna Vice President - Finance and Chief Financial Officer (Principal Financial and June 8, 1995 Accounting Officer) Exhibit Index -------------- Exhibit No. Description - ----------- ----------- 27 Financial Data Schedule