-----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, ULXKGBz0sCPYhiwsKFW29fKsX8Bg4itPrjKzKxqWvG/dI2XnWdNx9BGHYkDrRrmi 4xRgpbXIEMoy+r+ADZV6Dg== /in/edgar/work/0001043894-00-000002/0001043894-00-000002.txt : 20001115 0001043894-00-000002.hdr.sgml : 20001115 ACCESSION NUMBER: 0001043894-00-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRO VORAXIAL TECHNOLOGY INC CENTRAL INDEX KEY: 0001043894 STANDARD INDUSTRIAL CLASSIFICATION: [1040 ] IRS NUMBER: 830266517 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-30454 FILM NUMBER: 767005 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 1 0001.txt 10QSB ATLAS PEARLMAN, P.A. 350 East Las Olas Boulevard, Suite 1700 Fort Lauderdale, Florida 33301 November 14, 2000 Securities and Exchange Commission Office of Small Business Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549 Attention: Filing Desk Re: Enviro Voraxial Technology, Inc. (the "Company") Form 10-Q/SB Dear Sir/Madam: Enclosed for electronic filing on behalf of the Company is the Form 10-Q/SB. Should you have any questions or comments regarding the enclosed, please call the undersigned at (954) 763-1200. Very truly yours, ATLAS PEARLMAN, P.A. By: /s/ Brian Pearlman Brian Pearlman BAP U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 11 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 [ ] 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.) 98 SE 7th Street, Deerfield Beach, Florida 33441 (Address of principal executive offices) (954) 421-6141 (Issuer's telephone number) (Former Name, former address and former fiscal year, if changed since last Report.) 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 State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 7,407,118 Common Stock as of November 14, 2000. INDEX PART 1. FINANCIAL INFORMATION Item 1. Financial Statements Basis of Presentation 2 Balance Sheet - September 30, 2000 3 Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2000 and 1999 4 Statement of Cash Flows (unaudited) for the Nine Months Ended September 30, 2000 and 1999 5 Notes to Financial Statements 6 - 7 Item 2. Management's Discussion and Analysis and Plan of 8 - 9 Operation PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 5. Other Information 10 Item 6. Exhibits and reports on Form 8-K 10 - 11 Signatures 12 PART I. FINANCIAL INFORMATION Item 1. 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 generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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 generally accepted accounting principles 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 nine month period ended September 30, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes for the year ended December 31, 1999 found in the Company's Form 10-KSB. 2 ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED BALANCE SHEET (Unaudited) ASSETS September 30, 2000 Current Assets: Cash and cash equivalents $ 232,000 Accounts and other receivable, net 21,000 Inventory 119,000 ----------- Total current assets 372,000 Property, plant and equipment, net 1,009,000 Other assets 7,000 ----------- $1,388,000 =========== LIABILITIES Current Liabilities: Current Portion of mortgage note payable $ 10,000 Current Portion of obligations under capital leases 51,000 Accounts payable and accrued expenses 98,000 Due to Stockholders 260,000 ----------- 419,000 Noncurrent liabilities: Mortgage note payable 401,000 Obligations under capital lease 100,000 ----------- 501,000 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, 7,407,118 shares issued and outstanding 7,000 Additional paid-in capital 1,276,000 Accumulated deficit ( 821,000) ----------- 468,000 ----------- $1,388,000 =========== 3
ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2000 1999 2000 1999 ---- ---- ---- ---- Net sales $ 51,000 $ 7,000 $ 192,000 $ 113,000 Cost of goods sold 21,000 3,000 78,000 83,000 ------ ------ ------ ------ Gross profit 30,000 4,000 114,000 30,000 ------ ------ ------ ------ Other (income) and expenses: Research and development 27,000 25,000 48,000 25,000 General and administrative 121,000 67,000 374,000 214,000 Interest expense 11,000 16,000 37,000 41,000 Other income ( 12,000) ( 8,000) (43,000) ( 9,000) ------- ------- ------- ------- Total costs and expenses 147,000 100,000 416,000 271,000 ------- ------- ------- ------- Net Loss $( 117,000) $ (96,000) $( 302,000) $( 241,000) ========= ======== ========== ========== Basic and diluted (loss)per common share $( 0.02) $ ( 0.01) $( .04) $( .04) ========= ======== ========== ========== Weighted average number of common shares Outstanding 7,407,118 6,740,418 7,374,428 6,625,418 ========== ========== ========== ==========
4
ENVIRO VORAXIAL TECHNOLOGY, INC CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30 2000 1999 ---- ---- Cash flows from operating activities: Net Loss $ ( 302,000) $ ( 241,000) Adjustments to Reconcile net loss to net cash (used in) provided by operating activities: Depreciation 87,000 60,000 Stock issued for services - 45,000 Bad debts 24,000 - Changes in: Accounts receivable 12,000 45,000 Inventory ( 19,000) ( 3,000) Accounts payable and accrued expenses 45,000 ( 35,000) ------------ ------------ Net cash used in operating activities ( 153,000) ( 129,000) ------------ ------------ Cash flows from investing activities: Acquisition of property and equipment ( 4,000) ( 89,000) ------------ ------------ Cash Flows from Financing Activities: Proceeds from sale of common stock 362,000 - Proceeds from mortgage payable - 186,000 Repayment of mortgage note payable ( 7,000) ( 7,000) Repayments of obligations under capital leases ( 34,000) ( - ) ------------ ------------ Net cash provided by financing activities 321,000 179,000 ------------ ------------ Increase (decrease) in cash and Cash equivalents 164,000 ( 39,000) Cash and cash equivalents, beginning 68,000 69,000 ------------ ------------ Cash and cash, equivalents, end $ 232,000 $ 30,000 ============ ============
5 ENVIRO VORAXIAL TECHNOLOGY, INC NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE A - ORGANIZATION AND OPERATIONS Enviro Voraxial Technology, Inc. (the "Company") operates a high precision engineering machine shop located in Florida, which designs, manufactures and assembles specialized parts and components. Prior to 1999, the Company performed contract-manufacturing services to the aerospace and automotive industries. Since 1999, the Company has been focusing its efforts on developing and marketing the Voraxial Separator ("VAS"). The VAS is a continuous flow turbo machine that efficiently separates 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 VAS 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. Potential commercial applications include ballast water exchange, oil/water separation, sewage separation, environmental cleanup and the separation of industrial chemicals. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [1] Principles of consolidation: The consolidated financial statements as of September 30, 2000 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). [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 has been excluded from the calculation since it would be anti-dilutive. [5] Inventory: Inventory, which consists primarily of parts, is priced at lower of first-in, first-out cost or market. 6 ENVIRO VORAXIAL TECHNOLOGY, INC NOTES TO FINANCIAL STATEMENTS NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) [6] Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles 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. [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. [9] Revenue recognition: The Company recognizes revenue from product sales when the products are shipped to customers. [10] Fair value of financial instruments: The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and amounts due to stockholders approximate fair value due to their short maturities. Mortgage note payable and obligations under capital leases approximate fair value as the interest rates applicable to these debt instruments are comparable to quoted market prices for similar issues. Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations General Management's discussion and analysis contains various forward-looking statements. These statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" or "continue" or use of negative or other variations or comparable terminology. We caution that these statements are further qualified by important factors that could cause actual results to differ materially from those contained in the forward-looking statements, that these forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. 7 Three Months ended September 30, 2000 and 1999 Net Sales. Our net sales increased by approximately 629% to $51,000 as compared to $7,000 for the previous three months ended September 30, 1999. This sales increase was primarily do to increased shipments to New Venture Gear in the third quarter of 2000. Our gross profit was $30,000 for the three months ended September 30, 2000 as compared to $4,000 for the previous three months ended September 30, 1999. This increase in gross profit was also primarily due to shipments to New Venture Gear in the third quarter of 2000. General and Administrative expenses General and Administrative expenses increased by 81% to $121,000 for the three months ended September 30, 2000 up from $67,000 for the previous three months ended September 30, 1999. This increase was due to increased marketing efforts for application sales of the Voraxial Separator. We have rented excess space in our operating facility. Income amounted to $12,000 in the three months ended September 30, 2000. The monthly rental income amounts to $4,000 per month. Nine Months ended September 30, 2000 and 1999 Net Sales. Our net sales increased by approximately 70% to $192,000 as compared to $113,000 for the previous nine months ended September 30, 1999. This increase was due to increased contract requirements for New Venture Gear and other various contracts. Our gross profit was $114,000 for the nine months ended September 30, 2000 as compared to $30,000 for the previous nine months ended September 30, 1999. During the first nine months of 2000, new customer orders of machine work were at a higher margin. The Company is only focusing on higher margin machine work. Concentration and efforts of the Company are centered on marketing and developing the foundation for future growth around the Voraxial Separator. General and administrative expenses General and administrative expenses increased by 75% to $374,000 for the nine months ended September 30, 2000 up from $214,000 for the previous nine months ended September 30, 1999. Increased marketing activities for the Voraxial Separator generated additional general and administrative expenses. We have rented excess space in our operating facility. Income amounted to $42,000 in the nine months ended September 30, 2000. The monthly rental income amounts to $4,000 per month. 8 Liquidity and capital resources For the nine months ended September 30, 2000 our working capital increased by $102,000 from December 31, 1999. This increase was represented by an increase in cash of $164,000, decrease of accounts receivable of $36,000 inclusive of allowance for doubtful accounts of $24,000, and an increase in inventory of $19,000 and an increase in current liabilities of $45,000. Operating at a loss for the nine months negatively impacted our cash position, however we feel that we have sufficient sources for needed capital. Working capital for the next twelve months will be obtained from a number of sources. The continuing contract for parts supplied to New Venture Gear will be approximately $120,000. We will continue to take on machining contracts to supplement working capital, if necessary, from our past customer. As discussed in "Other Information" the Ballast Water Treatment System, which is centered around the Company's patented Voraxial Separator, has received financial contributions in the form of grants and resources from various entities, such as NOAA, the Port Administration of Maryland and the US Maritime Administration, in support of its Ballast Water Treatment System. Since the Voraxial Separator can enhance the efficiency and productivity in other industries, the Company is also pursuing the development of other systems that can benefit by incorporating the Voraxial Separator. The Company anticipates that as interest and awareness of the Voraxial Separator continues to increase, revenues should begin to be realized from a variety of industries. We believe that we have sufficient liquidity to meet all of our cash requirements through the period of the next twelve months after the quarter ended September 30, 2000. An increase in cash flow will be generated by sales and leasing of the Voraxial Separator, which will phase in over the next year. We believe, however, that additional funding may eventually be necessary to expand marketing programs and specific applications for the Voraxial Separator. We have raised $362,000 in the first quarter of 2000 through the private placement of our securities pursuant to Regulation D of the Securities Act. Continuing losses Since 1999 we have encountered expenses in the development of our Voraxial Separators and have had limited revenues from this development. Consequently, our working capital may not be sufficient and our operating costs may exceed those experienced in our prior years. While we have raised funds through the private placement of securities, given our limited operations, we may be unable to continue as a going concern. Cautionary Statement Regarding Forward-Looking Statements: Certain statements contained in this Section and elsewhere in this report regarding matters that are not, historical facts are forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All statements, which address operating performance, events or developments that management expects or anticipates to incur in the future, including statements relating to sales and earnings growth or statements expressing general optimism about future operating results, are forward-looking statements. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance. Many factors could cause actual results to differ materially from estimates contained in management's forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, adverse economic conditions, competitive pressures, inadequate capital, unexpected costs, lower revenues, net income and forecasts, the possibility of fluctuation and volatility of the Company's operating results and financial condition, inability to carry out marketing and sales plans and loss of key executives, among other things. 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 5. Other Information As mentioned in the last quarter report, the following events have continued: The University of Maryland has recently received a commitment of funding of approximately $300,000 from The National Oceanic and Atmospheric Administration, an agency of the U.S. Department of Commerce. This is one of the largest sea grants ever issued by NOAA and will be used to support testing of a patent pending Ballast Water Treatment System developed by the Company and Maritime Solutions Inc. The Ballast Water Treatment System is a state-of-the-art, high flow rate, ballast water purification technology, which reduces particulate sediment and treats unwanted marine organisms for the distinct purpose of inhibiting the introduction of non-indigenous and invasive marine organisms into local waters. Simultaneously, the system significantly reduces the build-up of sand and sediments in the ships ballast tanks, which can potentially save the industry billions of dollars in cleaning expenses. The testing is being done in cooperation with the University of Maryland and it is scheduled to begin next month in the Chesapeake Bay area in Baltimore. The Maryland Department of Transportation and the Maryland Port Administration have endorsed the testing of this water treatment system in Baltimore Harbor. In addition, the Maryland Port Administration has recently committed nearly $363,000 to rigorously test and evaluate the Ballast Water Treatment System as an immediate solution for the treatment of ballast water to the shipping industry. The testing is being done in cooperation with the University of Maryland's Chesapeake Biological Laboratory. Dr. David A. Wright and Dr. Roger Dawson of the Chesapeake Biological Laboratory will be the co-principal investigators for the evaluation. Dr. Wright is an expert in the field of Environmental Toxicology, while Dr. Dawson is an analytical chemist with extensive expertise in the areas of natural product biocides and ultraviolet (UV) light technology. The Company and Maritime Solutions Inc. have also received the support of the U.S. Maritime Administration (MARAD), an agency of the U.S. Department of Transportation, to evaluate the Ballast Water Treatment System. Testing will be performed aboard one of MARAD's U.S. Ready Reserve Fleet ships, the Cape May. The Cape May is an 875-foot long cargo carrier of 39,000 dead weight tons and contains 23 ballast tanks with a combined capacity to carry 25,547 metric tons of ballast water. The testing program is scheduled to begin during the month of August and is being conducted to conform to a recent testing program supported by the U.S. Coast Guard Research and Development Center. For the purpose of this evaluation, the EVTN Model 8000 Voraxial Separator has been selected. The unit is capable of processing 4,500 gpm of ballast water. The complete ballast water treatment system to be tested will include the utilization of a single 8-inch EVTN Model 8000 Voraxial Separator, an ultraviolet light system and, alternatively, a specific chemical biocide pre-selected to treat marine species. If accepted for use by the U.S. Coast Guard, Maritime Solutions Inc. will commence selling efforts of a commercial Ballast Water Treatment System within the shipping industry. An application will also be submitted to the International Maritime Organization for approval of the EVTN/Maritime Solutions' Ballast Water Treatment System to be accepted as the alternative to ballast water exchange. Each year, ships exchange about 10 billion metric tons of ballast water. Management believes that the potential market for approved ballast water treatment systems may exceed $2 billion within the next 5 years. 10 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-B The following exhibits are filed as part of this report: Exhibits: (27.1) Financial Data Schedule (b) Reports on Form 8-K On March 27, 2000, the Company filed a report on Form 8-K to indicate a change in the Company's auditors. 11 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: November 14, 2000 12 EX-27 2 0002.txt FDS --
5 0001043894 ENVIRO VORAXIAL TECHNOLOGY, INC. 1 U.S. DOLLARS 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 1 232,000 0 45,000 (24,000) 119,000 372,000 1,430,000 (421,000) 1,388,000 419,000 0 0 6,000 7,000 455,000 1,388,000 192,000 192,000 78,000 416,000 0 0 0 (302,000) 0 (302,000) 0 0 0 (302,000) (.04) (.04)
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