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 June 30, 2002, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from NA to NA.
Commission File Number 0-16106
APA OPTICS, INC.
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-1347235
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2950 N.E. 84TH LANE, BLAINE, MINNESOTA 55449
(Address of principal executive offices and zip code)
(763) 784-4995
(Registrant's telephone number, including area code)
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 the filing
requirement for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class: Outstanding at July 19, 2002
Common stock, par value $.01 11,875,131
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APA OPTICS, INC.
CONDENSED BALANCE SHEETS
June 30, March 31,
2002 2002
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 30,121,157 $ 31,606,403
Accounts receivable 48,320 20,613
Inventories:
Raw materials 14,932 21,448
Work-in-process & finished goods - 18,627
Prepaid expenses 65,267 103,588
Bond reserve funds 18,750 70,000
------------- -------------
TOTAL CURRENT ASSETS 30,268,426 31,840,679
PROPERTY, PLANT AND EQUIPMENT, NET 3,647,813 3,748,004
OTHER ASSETS 764,800 807,727
------------- -------------
TOTAL ASSETS $ 34,681,039 $ 36,396,410
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 1,589,697 $ 1,996,345
Accounts payable 70,403 127,926
Accrued expenses 307,886 302,204
------------- -------------
TOTAL CURRENT LIABILITIES 1,967,986 2,426,475
LONG-TERM DEBT 449,015 465,018
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Undesignated shares; 4,999,500 shares authorized -
none issued - -
Common stock, $.01 par value:
Authorized - 50,000,000
Issued and outstanding shares:
11,875,131 shares on June 30, 2002 and
11,875,881 shares on March 31, 2002 118,751 118,759
Paid-in-capital 51,590,308 51,578,185
Deficit (19,445,021) (18,192,027)
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 32,264,038 33,504,917
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 34,681,039 $ 36,396,410
============= =============
2
APA OPTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
June 30
--------------------------
2002 2001
------------ ------------
REVENUES $ 72,451 $ 434,335
COSTS AND EXPENSES:
Cost of sales 753,720 942,853
Research and development 355,712 182,593
Selling, general and administrative 321,579 436,615
------------ ------------
1,431,011 1,562,061
------------ ------------
LOSS FROM OPERATIONS (1,358,560) (1,127,726)
OTHER INCOME (EXPENSE):
Interest income 133,092 519,589
Interest expense (27,276) (35,925)
------------ ------------
105,816 483,664
------------ ------------
LOSS BEFORE INCOME TAXES (1,252,744) (644,062)
INCOME TAXES (250) (1,000)
------------ ------------
NET LOSS $(1,252,994) $ (645,062)
============ ============
NET LOSS PER SHARE:
Basic and diluted $ (0.11) $ (0.05)
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic and diluted 11,875,840 11,917,291
============ ============
3
APA OPTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
June 30
--------------------------
2002 2001
------------ ------------
OPERATING ACTIVITIES:
Net loss $(1,252,994) $ (645,062)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 156,551 146,578
Deferred compensation expense 13,402 14,392
Changes in operating assets and liabilities:
Accounts receivable (27,707) 61,544
Inventories 25,143 11,472
Prepaid expenses 38,321 11,096
Accounts payable and accrued expenses (51,841) (401,513)
Other 42,927 (4,438)
------------ ------------
Net cash used in operating activities (1,056,198) (805,931)
INVESTING ACTIVITIES:
Purchases of property and equipment (56,360) (446,203)
Proceeds from the sale of short-term investments - 15,759,000
------------ ------------
Net cash used in investing activities (56,360) 15,312,797
FINANCING ACTIVITIES:
Proceeds from the sale of common stock - 24,433
Payment of long-term debt (422,651) (335,036)
Repurchase of common stock (1,287) -
Bond reserve funds 51,250 47,500
------------ ------------
Net cash provided by (used in) financing activities (372,688) (263,103)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,485,246) 14,243,763
CASH AND CASH EQUIVALENTS, beginning of period 31,606,403 21,225,492
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $30,121,157 $35,469,255
============ ============
4
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
For further information, refer to the financial statements and accompanying
footnotes included in the Company's annual report on Form 10-K for the year
ended March 31, 2002. This report is accessible through the Company's web site
at www.apaoptics.com under "Investor Relations," on the Securities and Exchange
-----------------
Commission's web site at www.sec.gov, or you may request a copy directly from
-----------
the Company at the address listed on the front of this report.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.
NOTE 2. NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
Three Months Ended
June 30
--------------------------
2002 2001
------------ ------------
Numerator:
Numerator for basic and diluted
net loss per share-loss available
to common shareholders $(1,252,994) $ (645,062)
============ ============
Denominator for basic and diluted
net loss per share-weighted-
average shares 11,875,840 11,917,291
============ ============
Basic and diluted net loss per share $ (0.11) $ (0.05)
============ ============
Basic net loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding. Diluted net loss per share is
computed by dividing net loss by the weighted average number of common shares
and common share equivalents related to stock options and warrants, when
dilutive.
Common stock options and warrants to purchase 775,872 and 333,175 shares of
common stock with a weighted average exercise price of $9.01 and $14.80 were
outstanding on June 30, 2002 and June 30, 2001 respectively. These warrants and
options were excluded in calculating the diluted net loss per share because they
were antidilutive.
5
ITEM 2. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Some of the statements contained in this report on Form 10-Q that are not
purely historical are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including,
without limitations, statements regarding the Company's expectations, hopes,
beliefs, anticipations, commitments, intentions and strategies regarding the
future. Forward-looking statements include, but are not limited to, statements
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations." Actual results could differ from those projected in any
forward-looking statements for the reasons, among others, detailed under
"Factors That May Affect Future Results" in this Report. We believe that many of
the risks detailed in this Report are part of doing business in the industries
in which we compete and will likely be present in all periods reported. The fact
that certain risks are characteristic of an industry does not lessen the
significance of the risk. The forward-looking statements are made as of the date
of this Form 10-Q. We assume no obligation to update the forward-looking
statements or to update the reasons why actual results could differ from those
projected in the forward-looking statements.
OVERVIEW
- --------
We are engaged in designing, manufacturing, and marketing various optical
components (primarily dense wavelength multiplexer / demultiplexers or "DWDMs"),
ultraviolet (UV) detection and measurement devices, and optical components. For
several years, we also received significant revenues from research and
development services projects sponsored by various government agencies. In
fiscal 1998, we shifted our emphasis from research and development to product
development, with the intent to eventually manufacture and market our own
proprietary products.
We received no revenues from government sponsored research in fiscal 2001
or in fiscal 2002 and do not expect any revenues from this source in fiscal
2003, however, one of our research and development areas, Gallium Nitride (GaN)
based transistors, has drawn significant attention from various government
agencies over the past few years. We may seek future involvement in government
sponsored research projects that are closely related to our internal development
efforts to capitalize on the synergies the two activities generate; but our
primary focus will remain the commercialization of products based on this
research.
Two of our GaN based products, the TRUVMETERTM and the SunUVWatch(R), have
required extended engineering and prototyping phases that have resulted in
delays in their full rollout to the market. Recent efforts to resolve these
issues appear to be successful and we currently expect both of these products to
be released before the end of our third fiscal quarter on December 31, 2002.
Most companies in the communications equipment industry have been affected
by the slowdown in telecommunications equipment spending. Continued weakness in
the general economy, and the telecom sector in particular, has resulted in
downward pressure on DWDM component pricing, margins and profits. While we have
recently seen a limited increase in requests for quotes for DWDM components, we
do not know if or when demand will return to levels allowing profitable
production of the components.
In response to these market conditions, we are seeking to expand our
optical components product offering through both internally developed and
externally sourced products. We are also aggressively seeking lower cost
components and more efficient assembly processes to reduce the manufacturing
costs of our DWDM products. We have identified multiple sources for lower costs
components and complementary products and expect to see some initial benefits of
these efforts in the current fiscal year. We intend to utilize our experience in
core technologies upon which various fiber optic components are based, our
understanding of our customers' needs, our own products, our relationships with
suppliers, and our experience in developing solutions to industry problems to
develop future business opportunities in this arena.
6
RESULTS OF OPERATIONS
- -----------------------
REVENUES
Revenues for the three-month period ended June 30, 2002, were $72,451,
reflecting an 83% decrease compared to the same period in the preceding fiscal
year. The majority of the decrease occurred in sales of DWDM components that
totaled $415,031 for the first quarter of fiscal 2002 compared to $45,790 for
the first quarter of fiscal 2003. The slowdown in the telecommunications market
has significantly reduced demand for this type of component. It is unclear at
this time when demand for these components will return. Moreover, decline in the
average selling prices of DWDM components will require increased units sales in
order to achieve previous levels of revenue.
COST OF SALES
Cost of sales decreased $189,133 for the three-month period ended June 30,
2002 to $753,720, reflecting a 20% decrease compared to the same period in the
preceding fiscal year. The decrease in the cost of sales was related to
decreased sales and the realignment of our work force in November of 2001, which
reduced the number of employees in the production area. Gross margins for sales
were negative in both periods. The fluctuation in cost of sales and the negative
gross margins are influenced by the low unit production and sales levels
relative to the capital equipment and personnel committed to production of our
DWDM products. We expect to continue to experience negative gross margins until
there is a significant increase in sales volume and production levels.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses increased by $173,119 from the
three-month period ended June 30, 2001, to $355,712 for the three-month period
ended June 30, 2002. This represents an increase of 95%. The increase is the
result of the addition of personnel and equipment as we increase our development
efforts, particularly with respect to GaN based transistors. We plan to further
expand our research and product development activities and expect to incur
increased expenses related to these activities in the future.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses decreased $115,036 for the
three-month period ended June 30, 2002, to $321,579 reflecting a 26% decrease
from the three-month period ended June 30, 2001. The decrease was primarily due
to a decrease in personnel as a result of our realignment in November of 2001.
OTHER INCOME AND EXPENSE
Other income decreased $377,848 for the three-month period ended June 30,
2002 to $105,816, from the comparable period in the preceding fiscal year. The
decrease was due to a decline in interest income that resulted from a
combination of a decline in interest rates on short-term securities and a
decline in cash invested as a result of the use of cash in operations and for
capital expenditures. We expect to generate less interest income in fiscal 2003
compared to the prior fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
APA's cash and cash equivalents primarily consist of certificates of
deposits, US Government instruments or commercial paper with maturities of less
than three months. The balance of cash and cash equivalents at June 30, 2002 is
$30,121,157 compared to $31,606,403 at March 31, 2002.
7
We used $1,056,198 in operating activities for the three months ended June
30, 2002, compared to $805,931 for the comparable period in the preceding fiscal
year. Our use of cash in operations was primarily the result of our net loss and
was partially offset by non-cash charges such as depreciation, amortization and
non-cash compensation to employees.
We used net cash of $56,360 in investing activities in the three months
ended June 30, 2002, all of which was used for the purchase of property and
equipment additions. Investing activities provided $15,312,797 of cash in the
comparable period of the preceding fiscal year. Our limited use of cash for
investing activities in the first quarter of the current fiscal year reflects
our decision to delay capital expenditures and conserve cash in response to the
slowdown in capital expenditures by telecommunication companies. The significant
cash provided by investing activities in the preceding fiscal year was primarily
the result of short-term investments maturing and investment of the proceeds in
instruments that were classified as cash.
Net cash used in financing activities in the three months ended June 30,
2002 totaled $372,688. We used $422,651 for the scheduled reduction of debt. The
reduction of bond reserve funds provided $51,250 of cash. We used $1,287 to
repurchase 750 shares of common stock during the quarter at an average of $1.70
per share.
Our principal source of liquidity is our cash of $30,121,157. We believe
our current cash is sufficient to fund our operations for at least the next 12
months. However, we may also consider the acquisition of, or investment in,
products or businesses complementary to our business. Any such acquisition or
investment could require additional capital. Additionally, these activities
could require the early retirement of our debt. We cannot provide any assurance
that we will not seek additional capital through public or private equity or
debt financing within this timeframe or that this additional capital, if
necessary, will be available to us at all or on acceptable terms.
Our contractual obligations and commitments are summarized in the table
below:
Less than After
Total 1 Year 1-3 years 4-5 years 5 years
--------------------------------------------------------
Long-term debt $2,039,000 $1,806,000 $ 53,000 $ 35,000 $145,000
Operating leases 274,000 110,000 161,000 3,000 -
--------------------------------------------------------
Total Contractual Cash
Obligations $2,313,000 $1,916,000 $ 214,000 $ 38,000 $145,000
========================================================
Application of Critical Accounting Policies
We have reviewed our use of estimates in applying our accounting policies
and determined that significant changes in our various estimates would not have
a material impact on the presentation of our financial condition, changes in
financial condition or results of operations. Accordingly, we do not consider
any of our estimates to be "critical estimates" as defined in the rules of the
Securities and Exchange Commission. See Note A of Notes to Financial Statements
under Item 8 of our Report on Form 10-K for descriptions of the use of estimates
in our accounting policies. Our management and the audit committee of our board
of directors have discussed our use of estimates and have approved our
disclosure relating to it in this report.
In April 2002, SFAS 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" became effective for our company. SFAS 144 clarifies the
guidance used to measure impairment and clarifies the accounting for disposals
of long-lived assets. We have reviewed the effect of this Statement on our
financial statements and do not believe our adoption of the Statement has had or
will have a significant impact on our financial statements.
8
FACTORS THAT MAY INFLUENCE FUTURE RESULTS
- ----------------------------------------------
Unless we significantly increase our revenues, our increasing expenses and
negative cash flow will significantly harm our financial position.
We have not been profitable since fiscal 1990. As of June 30, 2002, we had
an accumulated deficit of $19.4 million. We expect to incur operating losses for
the foreseeable future, and these losses may be substantial. Further, we may
continue to incur negative operating cash flow in the future. We have funded our
operations primarily through the sale of equity securities and borrowings. We
have significant fixed expenses and we expect to continue to incur significant
and increasing manufacturing, sales and marketing, product development and
administrative expenses. As a result, we will need to generate significantly
higher revenues while containing costs and operating expenses if we are to
achieve profitability.
Declining average selling prices for our DWDM products will require us to reduce
production costs to effectively compete and market these products.
Since the time we first introduced our DWDM components to the marketplace,
we have seen the average selling price of this type of component decline. We
expect this trend to continue. To achieve profitability in this environment, we
must continually decrease our costs of production. In order to reduce our
production costs, we will continue to pursue one or more of the following:
- Seek lower cost suppliers of raw materials, components, or assemblies
within the United States, or internationally;
- Work to further automate our assembly process; or
- Develop and/or source value-added components.
We will also seek to form strategic alliances with companies that can
supply these components or services. Decreases in average selling prices also
require that we increase unit sales to maintain or increase our revenue. Our
efforts to increase revenues could include:
- Expansion of our product offerings, both through internally developed
and externally sourced products; and
- Expansion of both domestic and international marketing efforts.
There can be no guarantee that we will achieve these objectives or goals.
Our inability to significantly decrease production costs or increase our unit
sales could seriously harm our business, financial condition and results of
operations.
Our SunUVWatch(R) personal ultraviolet monitor is a relatively new consumer
product concept that may be adopted more slowly that projected.
The SunUVWatch(R) is an innovative product that helps consumers monitor and
plan their exposure to the UV radiation in sunlight. Personal UV monitoring is a
relatively new concept for consumers. Adoption and widespread use of the product
by consumers could take a substantial period of time and may not ever achieve
levels of acceptance necessary to make commercial production viable. In
addition, creation of brand identity and consumer awareness requires the
commitment of substantial capital and could divert resources from our
development efforts. Even if we are successful in developing a market for the
SunUVWatch(R), large consumer product manufacturers with strong name brand
identity could develop competing devices resulting in declining average selling
prices and increased marketing costs for this type of product. Moreover, we have
limited experience in designing for, and marketing to, the retail consumer
market.
9
We have limited experience in the development, manufacturing, marketing and
distribution of products internationally.
If our effort to reduce the development and manufacturing costs of our
products and/or seek more international customers requires the expansion of
offshore subcontracting or the establishment of facilities outside of the United
States, we will be subject to inherent risks, including, without limitation:
- Reduced protection of intellectual property rights in foreign
countries in which we may choose to operate;
- Difficulties in attracting, training and retaining qualified staff;
- Political and economic instability, terrorism or war;
- The increased burden of complying with foreign laws and tax
structures; and
- Risks associated with fluctuations in the value of foreign currencies.
Demand for our products is subject to significant fluctuation. Market conditions
in the telecommunications market in particular may harm our financial condition.
Demand for our optical components is dependent on several factors including
capital expenditures in the telecommunications industry. Capital expenditures
can be cyclical in nature and there may be protracted periods of reduced demand
for component parts. Similarly, periods of slow economic expansion or recession
can result in periods of reduced demand for our products. The current economic
slowdown has hit the telecommunications market particularly hard, resulting in a
significant reduction in capital expenditures for products such as our DWDMs. It
is impossible to predict how long the slowdown will last. Such periods of
reduced demand harm our business, financial condition and results of operations.
We must increase our manufacturing capacity or we will not be able to deliver
our products to our customers in a timely manner.
Manufacturing of our products is a complex and precise process. We have
limited experience in rapidly increasing our manufacturing capacity or in
manufacturing products at high volumes. We will be required to hire, train and
manage additional manufacturing personnel and improve our production processes
in order to increase our production capacity. There are numerous risks
associated with rapidly increasing capacity, including:
- Difficulties in achieving adequate yields from new manufacturing
lines;
- Difficulty maintaining the precision manufacturing processes required
by our products while increasing capacity;
- The inability to timely procure and install the necessary equipment;
- The lack of availability of qualified manufacturing personnel; and
- The inability to timely procure outsourced components.
Our manufacturing expansion and related capital expenditures have been or
are being made in anticipation of a level of customer orders that have not and
may not be realized. If anticipated levels of customer orders are not received,
we will not be able to generate positive gross margins and profitability.
Our dependence on outside manufacturers may result in product delivery delays.
We purchase components that are incorporated into our products from outside
vendors. If these vendors fail to supply us with components on a timely basis,
we could experience significant delays in shipping our products. Any significant
interruption in the supply or support of any components could seriously harm our
sales and our relationships with our customers.
Our products may have defects that are not detected before delivery to our
customers.
10
Some of our products are designed to be deployed in large and complex
optical networks and must be compatible with other components of the system,
both current and future. In addition, our products may not operate as expected
over long periods of time. Our customers may discover errors or defects in our
products only after they have been fully deployed. If we are unable to fix
errors or other problems, we could lose customers, lose revenues, suffer damage
to our brand and reputation, and lose our ability to attract new customers or
achieve market acceptance. Each of these factors would negatively impact cash
flow and would seriously harm our business, financial condition and results of
operations.
We must introduce new products and product enhancements to increase revenue.
The successful operation of our business depends on our ability to
anticipate market needs and to develop and introduce new products and product
enhancements that respond to technological changes or evolving industry
standards on a timely and cost-effective basis. Our products are complex, and
new products may take longer and/or cost more to develop than originally
anticipated. These products may contain defects or have unacceptable
manufacturing yields when first introduced or as new versions are released. Our
products could quickly become obsolete as new technologies are introduced. We
must continue to develop new products and introduce them to the commercial
market quickly in order to be successful. Our failure to produce technologically
competitive products in a cost-effective manner and on a timely basis will
seriously harm our business, financial condition and results of operations.
Our markets are characterized by rapid technological changes and evolving
standards.
The markets we serve are characterized by rapid technological change,
frequent new product introductions, changes in customer requirements and
evolving industry standards. In developing our products, we have made, and will
continue to make, assumptions with respect to which standards will be adopted
within our industry. If the standards that are actually adopted are different
from those that we have chosen to support, our products may not achieve
significant market acceptance.
Our products may infringe on the intellectual property rights of others.
Our products are sophisticated and rely on complicated manufacturing
processes. We have received several patents on certain aspects of our design and
manufacturing processes and we have applied for several more. Third parties may
still assert claims that our products or processes unlawfully utilize their
intellectual property. Defense against these claims, even if they lack merit,
may be time consuming, result in expensive litigation and divert management
attention from operational matters. If such a claim was successful, we could be
prevented from manufacturing or selling our current products, we could be forced
to redesign our products, or we could be required to license the relevant
intellectual property at a significant cost. Any of these actions could harm our
business, financial condition or results of operations.
We may be required to litigate to enforce and protect our intellectual property
rights.
Litigation against persons who infringe our intellectual property rights
could be expensive and may divert management resources from operating the
Company. Even if we prevail in such litigation, the costs incurred may adversely
affect us.
Acquisitions or investments could have an adverse effect on our business.
As part of our strategy to expand our product offerings, develop internal
sources of components and materials, and acquire new technologies, we
periodically review acquisition and investment prospects. There are inherent
risks associated with making acquisitions and investments, including but not
limited to:
- Challenges associated with integrating the operations, personnel,
etc., of an acquired company;
- Potentially dilutive issuances of equity securities;
- Reduced cash balances and/or increased debt and debt service costs;
- Large one-time write-offs of intangible assets;
- Risks associated with geographic or business markets different than
those we are familiar with; and
- Diversion of management attention from current responsibilities.
11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
Our exposure to market risk for changes in interest rates relates
primarily to our investment portfolio. We invest in short-term securities of
high credit issuers with maturities ranging from overnight up to 24 months. The
average maturity of the portfolio does not exceed 12 months. The portfolio
includes only marketable securities with active secondary or resale markets to
ensure liquidity. We have no investments denominated in foreign country
currencies and, therefore, our investments are not subject to foreign exchange
risk. See "Cash and Equivalents" and "Short-term Investments" in Note A of Notes
to Financial Statements included under Item 8 of our Report on Form 10-K for the
fiscal year ended March 31, 2002.
PART II
ITEMS 1 THROUGH 6 NOT APPLICABLE
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.
APA OPTICS, INC.
8/1/02 /s/ Anil K. Jain
- ------------ -------------------
Date Anil K. Jain
President and
Chief Executive Officer
8/1/02 /s/ Robert M. Ringstad
- ------------ -------------------------
Date Robert M. Ringstad
Chief Financial Officer
12