-----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, QesYY6ZD8UW8HY4fHjIEfKNGjF01imhnneFTK7May4Hi70AwgAxUXwxaqkaqxlNQ 0/CoTankzEeXcQzdrMgQKQ== 0001010549-02-000498.txt : 20020816 0001010549-02-000498.hdr.sgml : 20020816 20020815180207 ACCESSION NUMBER: 0001010549-02-000498 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRO VORAXIAL TECHNOLOGY INC CENTRAL INDEX KEY: 0001043894 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 830266517 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-30454 FILM NUMBER: 02740422 BUSINESS ADDRESS: STREET 1: 98 SE 7TH STREET STREET 2: STE 4-5 CITY: DEERFIELD BEACH STATE: FL ZIP: 33441 BUSINESS PHONE: 9544216141 MAIL ADDRESS: STREET 1: 720 S DEERFIELD AVE STREET 2: STE 4-5 CITY: DEERFIELD BEACH STATE: FL ZIP: 33441 10QSB/A 1 enviro.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A Amendment No. 1 [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission File Number: 0-27445 Enviro Voraxial Technology, Inc. (Exact name of Small Business Issuer as specified in its Charter) IDAHO 83-0266517 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 821 NW 57th Place, Fort Lauderdale, Florida 33309 (Address of principal executive offices) (954) 958-9968 (Issuer's telephone number) All Correspondence to: Brenda Lee Hamilton Esquire Hamilton, Lehrer and Dargan, P.A. 2 East Camino Real, Suite 202 Boca Raton Florida 33432 561-416-8956 Check mark whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 APPLICABLE ONLY TO CORPORATE ISSUERS As of August 5, 2002, we had 7,470,968 shares of our Common Stock outstanding. 1 INDEX PART 1. CONSOLIDATED FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Basis of Presentation ............................................... 3 Consolidated Balance Sheet (unaudited) - June 30, 2002 .............. 4 Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2002 and 2001 .................. 5 Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2002 and 2001 ................................ 6 Notes to Consolidated Financial Statements ........................ 7-9 Item 2. Management's Discussion and Analysis and Plan of Operation ........................................................ 9-11 PART II. OTHER INFORMATION Item 1. Legal Proceedings .................................................. 11 Item 2. Changes in Securities and Use of Proceeds .......................... 11 Item 3. Default Upon Senior Securities ..................................... 12 Item 4. Submission of Matters to a Vote of Securities ...................... 12 Item 5. Other Information .................................................. 12 Item 6. Exhibits and Reports on Form 8-K ................................... 12 Signatures .................................................................. 12 2 PART I. CONSOLIDATED FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (unaudited) Basis of Presentation The accompanying unaudited consolidated financial statements of Enviro Voraxial Technology, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three-month period ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes for the year ended December 31, 2001 found in the Company's Form 10-KSB. We may be unable to continue as a going concern, given our limited operations and revenues and our significant losses to date. Since 2001, we have encountered greater expenses in the development of our Voraxial Separators and have had limited rental income for pilot programs from this development. Consequently, our working capital may be insufficient and our operating costs may exceed those experienced in our prior years. In light of these recent developments, we may be unable to continue as a going concern. However, we believe that the exposure received in the past year for the Voraxial Separator has positioned the Company to begin generating sales and supply us with sufficient working capital. 3 ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED BALANCE SHEET (Unaudited) ASSETS
June 30, 2002 Current Assets: Cash and cash equivalents $ 160,000 Accounts receivable 11,000 Inventory 73,000 Other current assets 5,000 ----------- Total current assets 249,000 Property, plant and equipment, net 101,000 Other assets 5,000 ----------- $ 355,000 =========== LIABILITIES Current Liabilities: Current portion of obligations under capital leases $ 29,000 Accounts payable and accrued expenses 200,000 Deferred revenue 2,000 Deposits from customers 2,000 Due to investor 100,000 ----------- Total current liabilities 333,000 Noncurrent liabilities: Obligations under capital leases 30,000 ----------- 363,000 Stockholders' Equity: Capital stock, par value $.001 par value; Preferred stock, voting, 8% noncumulative, convertible, 7,250,000 authorized shares 6,000,000 shares issued and outstanding (at liquidating value) 6,000 Common stock, authorized 42,750,000 shares, 7,470,968 shares issued and outstanding 7,000 Additional paid-in capital 1,343,000 Accumulated deficit ( 1,364,000) ----------- (8,000) ----------- $ 355,000 ===========
4 ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For The Three Months For the Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Net sales Product $ 9,000 $ 0 $ 9,000 $ 0 Contract revenue 17,000 1,000 29,000 3,000 ------------ ------------ ------------ ------------ 26,000 1,000 38,000 3,000 Cost of goods sold Product 2,000 0 2,000 0 Contract revenue 2,000 0 6,000 1,000 ------------ ------------ ------------ ------------ 4,000 0 8,000 1,000 ------------ ------------ ------------ ------------ Gross profit 22,000 1,000 30,000 2,000 ------------ ------------ ------------ ------------ Other (income) and expenses: Research and development 69,000 64,000 120,000 102,000 General and administrative 74,000 133,000 127,000 186,000 Interest expense 3,000 17,000 6,000 34,000 Other income (2,000) (8,000) (2,000) (21,000) ------------ ------------ ------------ ------------ Total costs and expenses 144,000 206,000 251,000 301,000 ------------ ------------ ------------ ------------ Net Loss $( 122,000) $ (205,000) $ (221,000) $ (299,000) ============ =========== ============ =========== Basic and diluted (loss)per common share $ ( .02) $ ( .03) $ ( .03) $ ( .04) ============ =========== ============ =========== Weighted average number of common shares Outstanding 7,470,968 7,414,207 7,470,968 7,410,702 ============ =========== ============ ===========
5 ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, 2002 2001 ------------ ------------ Cash flows from operating activities: Net Loss $ ( 221,000) $( 299,000) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation 22,000 54,000 Stock issued for services rendered 35,000 Changes in: Accounts receivable - (1,000) Inventory 2,000 - Accounts payable and accrued expenses 47,000 41,000 Deferred revenue 2,000 - Deposits from customers 2,000 - ------------ ------------ Net cash used in operating activities ( 146,000) ( 170,000) ------------ ------------ Cash Flows from financing activities: Notes Payable - 30,000 Advances from shareholders - 100,000 Increase in note payable - stockholder - 13,000 Repayment of mortgage note payable - (5,000) Increase (decrease) of obligations under capital leases ( 17,000) (10,000) ------------ ------------ Net cash provided by financing activities ( 17,000) 128,000 ------------ ------------ Increase (decrease) in cash and Cash equivalents ( 163,000) ( 42,000) Cash and cash equivalents, beginning 323,000 133,000 ------------ ------------ Cash and cash, equivalents, end $ 160,000 $ 91,000 ============ ============
6 ENVIRO VORAXIAL TECHNOLOGY, INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - ORGANIZATION AND OPERATIONS Enviro Voraxial Technology, Inc. (the "Company" or "us") is the owner and manufacturer of the patented Voraxial Separator. The Voraxial Separator is a continuous flow turbo machine that efficiently separates a mixture of fluids or fluids and solids at extremely high flow rates while achieving very high levels of purity through the utilization of a strong centrifugal force or vortex. The scalability, efficiency and effectiveness of the Voraxial Separator make the technology universal to any industry requiring the separation of liquids and/or liquids and solids, regardless of the quantity needed to be processed. Prior to 1999, the Company performed contract-manufacturing services to the aerospace and automotive industries through the operation of its high precision engineering machine shop, which designed, manufactured and assembled specialized parts and components. Since 1999, the Company has been focusing its efforts on developing and marketing the Voraxial Separator. Potential commercial applications include sewage separation, oil/water separation, environmental cleanup, ballast water exchange, and the separation of industrial chemicals. We may be unable to continue as a going concern, given our limited operations and revenues and our significant losses to date. Since 2001 we have encountered greater expenses attributed to the development of our Voraxial Separators and have had limited rental income for pilot programs from this development. Consequently, our working capital may be insufficient and our operating costs may exceed those experienced in our prior years. In light of these recent developments, we may be unable to continue as a going concern. However, we believe that the exposure received in the past year for the Voraxial Separator has positioned the Company to begin generating sales and supply us with sufficient working capital. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [1] Principles of consolidation: The consolidated financial statements as of June 30, 2002 include the accounts of the parent company, Enviro Voraxial Technology, Inc., and its wholly owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated. [2] Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. [3] Property, plant and equipment: Property, plant and equipment are stated at cost. The cost of maintenance and repairs is charged against results of operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5 -20 years). 7 [4] Net loss per share: Basic and diluted loss per share has been computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding. The convertible preferred stock and warrants have been excluded from the calculation since it would be anti-dilutive. Such equity instruments may have a dilutive effect in the future and include the following potential common shares: Convertible preferred stock 6,200,000 Warrants 243,000 Stock options 45,000 --------- 6,488,000 [5] Inventory: Inventory, which consists of components for the voraxial separator and is priced at lower of first-in, first-out cost or market. Inventory includes components held by third parties in connection with pilot programs. As indicated in B [6], a significant estimate involves the value of the company's inventory. The value of the inventory was reduced to estimated market value in prior periods. As this inventory is reduced through product sales, the company may experience profit margins in excess of what normally may be expected to be achieved. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) [6] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ. A significant estimate involves the value of the Company's inventory. [7] Income taxes: Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. [8] Research and development expenses: Research and development costs are expensed as incurred. 8 [9] Revenue recognition: The Company recognizes contract revenue when earned. Revenues from voraxial separators for non-pilot programs are earned when shipped. Shipments to third parties in connection with pilot programs are not recognized as revenue and such components are included in inventory as of June 30, 2002. [10] Fair value of financial instruments: Obligations under capital leases approximate fair value as the interest rates applicable to these debt instruments are comparable to quoted market prices for similar leases. [11] Interim financial statements Financial statements as of June 30, 2002 are unaudited but in the opinion of management the financial statements include all adjustments consisting of normal recurring accruals necessary for a fair presentation of the comparative financial position and results of operation. Results of operations for interim periods are not necessarily indicative of those to be achieved or expected for the entire year. NOTE C - SUBSEQUENT EVENT Subsequent to the quarter ended June 30, 2002, the Company sold a Voraxial Separator to RAMCO Environmental, a California-based environmental firm specializing in the development and installation of water treatment systems. The Voraxial Separator will be incorporated into a stormwater system to be used by the United States Navy for the re-utilization of water. It is being developed in response to the commitment and support by the United States Department of the Navy for the National Pollutant Discharge Elimination System (NPDES) program which is part of the Clean Water Act administered by California's State Water Resources Control Board. Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations General Forward-Looking Statements: The following discussion of the financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. Enviro Voraxial Technology is referred to herein as "the Company", "we" or "our." The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements". Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Statements made herein are as of the date of the filing of this Form 10-QSB with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. 9 Three Months ended June 30, 2002 and 2001 Net Sales. Our net sales increased by approximately 2500% to $26,000 for the three months ended June 30, 2002 as compared to $1,000 for the previous three months ended June 30, 2001. This sales increase is attributable to our focused marketing efforts pertaining to the Voraxial Separator and continued sales from high precision contract manufacturing. We anticipate that our marketing efforts for the Voraxial Separator from this past year will continue to generate revenues in 2002. Because most of our efforts will continue to be focused on building, assembling, and marketing and selling efforts pertaining to our Voraxial Separator, we do not expect to generate as much revenue in 2002 from high precision machining. As indicated in B [6], a significant estimate involves the value of the company's inventory. The value of the inventory was reduced to estimated market value in prior periods. As this inventory is reduced through product sales, the company may experience profit margins in excess of what normally may be expected to be achieved. Research and Development expenses Research and Development expenses increased by 8% to $69,000 for the three months ended June 30, 2002, up from $64,000 for the previous three months ended June 30, 2001. Although we finalized the development of the Voraxial Separator, we increased expenditures for specific applications whereby the technology can be used. General and Administrative expenses General and Administrative expenses decreased by 44% to $74,000 for the three months ended June 30, 2002, down from $133,000 for the previous three months ended June 30, 2001. Because we are focusing a majority of our marketing efforts towards our Voraxial Separator, we are reducing our expenses associated with our high precision machining. As such, the general and administrative overhead we typically experienced with high precision machining was reduced and consolidated with activities supporting the Voraxial Separator. Six Months ended June 30, 2002 and 2001. Net Sales. Our net sales increased by approximately 1167% to $38,000 for the six months ended June 30, 2002 as compared to $3,000 for the previous six months ended June 30, 2001. This sales increase was due to our focused efforts on marketing of the Voraxial Separator and continued sales from high precision. We anticipate that the marketing efforts for the Voraxial Separator from this past year will continue to generate revenues in 2002. We do not expect to generate as much revenue in 2002 from high precision machining since most of our efforts will continue to be focused on building, assembling, marketing and selling the Voraxial Separator. As indicated in B [6], a significant estimate involves the value of the company's inventory. The value of the inventory was reduced to estimated market value in prior periods. As this inventory is reduced through product sales, the company may experience profit margins in excess of what normally may be expected to be achieved. Research and Development expenses Research and Development expenses increased by 18% to $120,000 for the six months ended June 30, 2002, up from $102,000 for the previous six months ended June 30, 2001. Although the company has finalized the development of the Voraxial separator, we increased expenditures for specific applications whereby the technology can be used. 10 General and Administrative expenses General and Administrative expenses decreased by 32% to $127,000 for the six months ended June 30, 2002, down from $186,000 for the previous six months ended June 30, 2001. We are reducing the expense allocated towards high precision machining and focusing a majority of our efforts on marketing of the Voraxial Separator. As such, the general and administrative overhead we typically experienced with high precision machining was reduced and consolidated with activities supporting the Voraxial Separator. Liquidity and capital resources For the six months ended June 30, 2002, our working capital decreased by $213,000 from December 31, 2001. This decrease was represented by a decrease in cash of $163,000, a decrease in inventory of $2,000 and an increase in current liabilities of $51,000. Operating at a loss for the three months negatively impacted our cash position. We anticipate that we will begin generating revenues and positive cash flow from the Voraxial Separator in 2002. To the extent such revenues and corresponding cash flows do not materialize, we will require infusion of capital to sustain our operations. We cannot be assured that the level of revenues will be self-sustaining or that required capital will be able to be obtained or on terms acceptable to us. Subsequent event Subsequent to the quarter ended June 30, 2002, we sold a Voraxial Separator to RAMCO Environmental, a California-based environmental firm specializing in the development and installation of water treatment systems. The Voraxial Separator will be incorporated into a stormwater system to be used by the United States Navy for the re-utilization of water. It is being developed in response to the commitment and support by the United States Department of the Navy in conjunction with the National Pollutant Discharge Elimination System (NPDES) program which is part of the Clean Water Act administered by California's State Water Resources Control Board. Continuing losses We may be unable to continue as a going concern, given our limited operations and revenues and our significant losses to date. Since 2001, we have encountered greater expenses in the development of our Voraxial Separators and have had limited rental income for pilot programs from this development. Consequently, our working capital may be insufficient and our operating costs may exceed those experienced in our prior years. In light of these recent developments, we may be unable to continue as a going concern. However, we believe that the exposure received in the past year for the Voraxial Separator has positioned the Company to begin generating sales and supply us with sufficient working capital. PART II. OTHER INFORMATION Item 1. Legal Proceedings Not applicable. Item 2. Changes in Securities and Use of Proceeds Not applicable 11 Item 3. Default Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Securities Not applicable Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-B 99.1 CERTIFRICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (b) Reports on Form 8-K Not applicable. SIGNATURE 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 as duly authorized officers of the Registrant. Enviro Voraxial Technology, Inc. By: /s/ Alberto DiBella ----------------------- Alberto DiBella, Chairman and President DATED: August 15, 2002 12 EX-99.1 3 enviro10qsbaex991063002.txt CERTIFICATION OF PERIODIC FINANCIAL REPORTS Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Enviro Voraxial Technology Inc. (the Company) on Amendment 1 to Form 10-QSB for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Alberto Dibella, , Chief Financial Officer, Principal Accounting Officer and Chief Executive Officer certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Alberto DiBella - ------------------- Alberto Dibella, Chief Financial Officer, Principal Accounting Officer and Chief Executive Officer August 15, 2002 -----END PRIVACY-ENHANCED MESSAGE-----