-----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, G2ALM6qv1zS1vTe8glazEkcj/xxoZRhZ6W2NxJM6udaFhIicy5xnPcmU1yN4PM3Z 6ZZbeJXG7ShzO2H/cJthDw== 0001110479-00-000010.txt : 20000922 0001110479-00-000010.hdr.sgml : 20000922 ACCESSION NUMBER: 0001110479-00-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000525 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: 643131 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 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 March 31, 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 Identification No.) incorporation or organization) 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 March 31, 2000. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Balance Sheets as of March 31, 2000 Statements of Operations for the Three Months Ended March 31, 2000 and March 31, 1999. Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000 and March 31, 1999. Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis and Plan of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K 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 three month period ended March 31, 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. ENVIRO VORAXIAL TECHNOLOGY, INC CONDENSED BALANCE SHEET (Unaudited) ASSETS March 31, 2000 ---------- Current Assets: Cash and cash equivalents $ 355,000 Accounts and other receivable, net 56,000 Inventory 92,000 ----------- Total current assets 503,000 Property, plant and equipment, net 1,065,000 Other assets 7,000 ----------- $1,575,000 =========== 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 63,000 Due to Stockholders 260,000 ---------- 384,000 ---------- Noncurrent liabilities: Mortgage note payable 406,000 Obligations under cap 116,000 ---------- 522,000 ----------- Stockholders' Equity: Capital stock, par value $.001 par value; Preferred stock, voting, 8% noncumulative, convertible, authorized 7,250,000 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 capita 1,276,000 Accumulated deficit ( 620,000) ---------- 669,000 ---------- $1,575,000 =========== ENVIRO VORAXIAL TECHNOLOGY, INC CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) For the Three Months Ended March 31, 2000 1999 ------------ ------------ Net sales $ 78,000 $ 59,000 Cost of goods sold 37,000 54,000 ----------- --------- Gross profit 41,000 5,000 ----------- --------- Other (income) and expenses: Research and development 14,000 - General and administrative 132,000 43,000 Interest expense 13,000 15,000 Other income ( 15,000) ( 1,000) Total costs and expenses 144,000 57,000 ------------ ---------- Net Loss $( 103,000) $(52,000) ============ ============ Basic and diluted (loss)per common share $( 0.01 ) $( 0.01 ) ============ ========== Weighted average number of common shares Outstanding 7,309,049 6,764,574 ============ =========== ENVIRO VORAXIAL TECHNOLOGY, INC CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) For the Three Months Ended March 31, 2000 1999 ------------ ------------ Cash flows from operating activities: Net Loss $( 103,000) $( 52,000) Adjustments to Reconcile net loss to net cash (used in) provided by operating activities: Depreciation 29,000 20,000 Bad debts 24,000 - Changes in: Accounts receivable ( 10,000) 25,000 Inventory 8,000 - Accounts payable and accrued expenses 10,000 - ------------ ------------ Net cash used in operating activities ( 42,000) ( 7,000) ------------ ------------ Cash flows from investing activities: Acquisition of property and equipment ( 3,000) - ------------ ------------ Cash Flows from Financing Activities: Proceeds from sale of common stock 352,000 - Repayment of mortgage note payable ( 2,000) - Repayments of obligations under capital leases ( 18,000) - ------------ ------------ Net cash provided by financing activities 332,000 - ------------ ------------ Increase (decrease)in cash and Cash equivalants 287,000 ( 7,000) Cash and cash equivalents, beginning 68,000 69,000 ------------ ---------- Cash and cash, equivalents, end $ 355,000 $ 62,000 ============ =========== ENVIRO VORAXIAL TECHNOLOGY, INC NOTES TO FINANCIAL STATEMENTS 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. The voraxial separator is a mechanical device for separating two or more components having different specific weights. Potential commercial applications include oil/water 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 March 31, 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. 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. [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. NOTE C: UNAUDITED FINANCIAL STATEMENTS The financial statements, as of March 31, 2000, and for the periods ended March 31, 2000 and 1999, included herein are unaudited; however, such information reflects all adjustments consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the information for such periods. In addition, the results of operations for the interim periods are not necessarily indicative of results for the entire year. The accompanying financial statements are in condensed form and should be read in conjunction with the Company's annual report filed on Form 10KSB. Item 2. Managements 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. Three Months ended March 31, 2000 and 1999 Net Sales. Our net sales increased by approximately 32% to $78,000 as compared to 59,000 for the previous three months ended March 31, 1999 Our gross profit was $41,000 for the three months ended March 31, 2000 as compared to $5,000 for the previous three months ended March 31, 1999 This is attributable to our change in business. During the first three months of 1999, new customer orders of machine work were at a minimum and efforts were focused on marketing of the Voraxial Separator. General and administrative expenses General and Administrative expenses increased by 207% to $132,000 for the three months ended March 31, 2000 up from $43,000 for the previous three months ended March 31, 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 $15,000 in the three months ended March 31, 2000. The monthly rental income amounts to $5,000 per month. Liquidity and capital resources For the three months ended March 31, 2000 our working capital increased by $272,000 from December 31, 1999. This increase was represented by an increase in cash of $287,000, decrease of accounts receivable of $1,000 inclusive of allowance for doubtful accounts of $24,000, decrease in inventory of $8,000 and offset by a increase in current liabilities of $6,000. Operating at a loss for the three 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 base. We believe that we have sufficient liquidity to meet all of our cash requirements for the remainder of the fiscal year ended December 31, 2000. We believe, however, that additional funding will eventually be necessary to expand marketing programs and specific applications for the Voraxial Separator. We have raised $364,800 in the first quarter of 2000 through the private placement of our securities pursuant to Regulation D of the Securities Act. Continuing losses We may be unable to continue as a going concern, given our limited operations and revenues and our significant losses to date. Throughout 1999 we have encountered greater 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. In light of these recent developments, 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. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 5. Other Information None. 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. 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: May 24, 2000 ATLAS PEARLMAN, P.A. 350 East Las Olas Boulevard, Suite 1700 Fort Lauderdale, Florida 33301 May 24, 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 collect at (954) 763-1200. Very truly yours, ATLAS PEARLMAN, P.A. By: /s/ Brian Pearlman Brian Pearlman BAP -----END PRIVACY-ENHANCED MESSAGE-----