-----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, KCSRLDsaZNp9OyvF8JtjP2eaQbNhyzYUnqY1lcK++Q/PsPjwQaW3YCKVCSNBn71k RRupqK9z6Re7pEnACV3hPQ== 0001013762-05-000607.txt : 20050516 0001013762-05-000607.hdr.sgml : 20050516 20050516165439 ACCESSION NUMBER: 0001013762-05-000607 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050516 DATE AS OF CHANGE: 20050516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRTRAX INC CENTRAL INDEX KEY: 0001081372 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL TRUCKS TRACTORS TRAILERS & STACKERS [3537] IRS NUMBER: 223506376 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-16237 FILM NUMBER: 05835447 BUSINESS ADDRESS: STREET 1: 870B CENTRAL AVENUE CITY: HAMMONTON STATE: NJ ZIP: 08037 BUSINESS PHONE: 609-567-7800 MAIL ADDRESS: STREET 1: 870B CENTRAL AVENUE CITY: HAMMONTON STATE: NJ ZIP: 08037 FORMER COMPANY: FORMER CONFORMED NAME: MAS ACQUISITION IX CORP DATE OF NAME CHANGE: 19990308 10QSB 1 mar31200510qsb.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2005. [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from __________ to ________. Commission file number: 001-16237 AIRTRAX, INC. (Name of Small Business Issuer in its charter) New Jersey 22-3506376 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 870B Central Avenue, Hammonton, New Jersey 08037 (Address of principal executive offices) (609) 567-7800 (Issuer's telephone number) Check whether issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court: Yes [ ] 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: As of May 10, 2005, the issuer had 21,703,039 shares of common stock, no par value, issued and outstanding. Transitional Small Business Issuer Format (Check One): Yes [ ] No [X] AIRTRAX, INC. MARCH 31, 2005 QUARTERLY REPORT ON FORM 10-QSB TABLE OF CONTENTS PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Balance Sheets 4 Statements of Operations and Deficit Accumulated During Development Stage 5 Statements of Cash Flows 6 Notes to Financial Statements 7 Special Note Regarding Forward Looking Statements 10 Item 2. Management's Discussion and Analysis or Plan of Operations 11 Item 3. Controls and Procedures 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 14 Item 6. Exhibits 14 SIGNATURES 16 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AIRTRAX, INC. (A Development Stage Company) FINANCIAL STATEMENTS MARCH 31, 2005 (Unaudited) CONTENTS -------- Page ---- Balance Sheets 4 Statements of Operations and Deficit Accumulated During Development Stage 5 Statements of Cash Flows 6 Notes to Financial Statements 7 3 AIRTRAX, INC. (A Development Stage Company) BALANCE SHEETS
March 31, 2005 December 31, 2004 (Unaudited) (Audited) ----------- ----------- ASSETS ------ Current Assets Cash ................................................. $ 3,187,890 $ 641,477 Accounts receivable .................................. 76,991 -- Accrued interest receivable .......................... 147,447 86,667 Inventory ............................................ 1,050,552 709,281 Prepaid expenses ..................................... -- 5,113 Vendor advance ....................................... 129,017 52,017 Deferred tax asset ................................... 282,559 224,414 ------------ ------------ Total current assets ........................ $ 4,874,456 $ 1,718,969 Fixed Assets Office furniture and equipment ....................... 96,807 90,714 Automotive equipment ................................. 21,221 21,221 Shop equipment ....................................... 26,446 24,553 Casts and tooling .................................... 205,485 205,485 ------------ ------------ 349,959 341,973 Less, accumulated depreciation ....................... 257,489 248,386 ------------ ------------ Net fixed assets ............................ 92,470 93,587 Other Assets Advances to FiLCO GmbH ............................... 3,825,000 2,670,000 Patents - net ........................................ 129,970 117,402 Utility deposits ..................................... 65 65 ------------ ------------ Total other assets .......................... 3,955,035 2,787,467 ------------ ------------ TOTAL ASSETS .................................... $ 8,921,961 $ 4,600,023 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable ..................................... $ 446,845 $ 394,959 Accrued liabilities .................................. 463,013 459,565 Shareholder deposits for stock ....................... -- 1,403,174 Shareholder notes payable ............................ 34,459 33,455 ------------ ------------ Total current liabilities ................... 944,317 $ 2,291,153 Stockholders' Equity Common stock - authorized, 100,000,000 shares without par value; 21,216,215 and 15,089,342 issued and outstanding, respectively ..................... 16,999,584 10,710,999 Preferred stock - authorized, 5,000,000 shares without par value; 275,000 issued and outstanding ......... 12,950 12,950 Deficit accumulated during the development stage ..... (8,827,938) (8,208,127) Deficit prior to development stage ................... (206,952) (206,952) ------------ ------------ Total stockholders' equity .................. 7,977,644 2,308,870 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .............................. $ 8,921,961 $ 4,600,023 ============ ============
The accompanying notes are an integral part of these financial statements. 4 AIRTRAX, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE For the Three Month Periods Ended March 31, 2005 and 2004 (Unaudited)
May 19, 1997 (Date of Inception) 2005 2004 to March 31, 2005 ----------- ----------- ------------- SALES ...................................... $ 76,991 $ -- $ 1,100,114 COST OF GOODS SOLD ......................... 52,361 -- 522,732 ------------ ------------ ------------ Gross Profit (Loss) ...... 24,630 -- 577,382 OPERATING AND ADMINISTRATIVE EXPENSES ...... 723,594 298,809 9,559,960 ------------ ------------ ------------ OPERATING LOSS ............................. (698,964) (298,809) (8,982,578) OTHER INCOME AND EXPENSE Interest expense .................. (40,272) (7,604) (215,336) Interest income ................... 61,144 -- 147,811 Other income ...................... 136 -- 78,430 ------------ ------------ ------------ LOSS BEFORE INCOME TAXES ................... (677,956) (306,413) (8,971,673) ------------ ------------ ------------ INCOME TAX BENEFIT (STATE): Current ........................... 58,145 25,959 58,145 Prior years ....................... -- -- 717,142 ------------ ------------ ------------ Total Benefit ............ 58,145 25,959 775,287 ------------ ------------ ------------ LOSS ACCUMULATED DURING DEVELOPMENT STAGE ................. (619,811) (280,454) (8,196,386) DEEMED DIVIDEND ON PREFERRED STOCK ......... -- -- 188,412 ------------ ------------ ------------ NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS ........................... (619,811) (280,454) (8,384,798) PREFERRED STOCK DIVIDENDS DURING DEVELOPMENT STAGE ................. -- (45,833) (443,140) ------------ ------------ ------------ DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE $ (619,811) $ (326,287) $ (8,827,938) ============ ============ ============ EARNINGS PER SHARE: NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS ........................... $ (619,811) $ (280,454) ADJUSTMENT FOR PREFERRED DIVIDENDS ......... (17,188) (17,188) ------------ ------------ LOSS ALLOCABLE TO COMMON SHAREHOLDERS ........................... $ (636,999) $ (297,642) ============ ============ NET LOSS PER SHARE- Basic and Diluted ...................... $ (.04) $ (.03) WEIGHTED AVERAGE SHARES OUTSTANDING ........ 15,523,209 9,336,042
The accompanying notes are an integral part of these financial statements. 5 AIRTRAX, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS For the Three Month Periods ended March 31, 2005 and 2004 (Unaudited)
May 19, 1997 (Date of Inception) 2005 2004 to March 31, 2005 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net Loss .............................................. $ (619,811) $ (280,454) $ (8,384,798) Adjustments to reconcile net income to net cash consumed by operating activities: Charges not requiring the outlay of cash: Depreciation and amortization ............. 10,833 9,053 312,030 Value of common stock issued for services . 5,113 145,539 2,832,481 Value of options granted for services ..... 83,650 -- 83,650 Increase in accrual of deferred tax benefit (58,145) (25,959) (282,559) Deemed dividends on preferred stock ....... -- -- 188,412 Interest accrued on shareholder loan ...... 1,004 1,998 22,645 Changes in current assets and liabilities: Increase in accrued interest receivable .. (60,780) -- (147,447) Increase in accounts receivable .......... (76,991) -- (76,991) Increase in vendor advances .............. (77,000) -- (129,017) (Decrease) Increase in accounts payable and accrued liabilities .............. (30,318) (269,923) 887,866 Increase in prepaid expense ............... -- -- (146,957) Increase in inventory .................... (341,271) (43,076) (1,050,552) ------------ ------------ ------------ Net Cash Consumed By Operating Activities ........... (1,163,716) (462,822) (5,891,237) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of equipment ............................. (7,986) (2,427) (356,270) Additions to patent cost .............................. (14,298) -- (172,229) Advances to FiLCO GmbH ................................ (1,155,000) (500,000) (3,825,000) ------------ ------------ ------------ Net Cash Consumed By Investing Activities .......... (1,177,284) (502,427) (4,353,499) CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds of issuance of convertible debt .......... 4,277,500 1,213,874 4,277,500 Net proceeds of common stock sales .................... 55,000 -- 8,627,611 Proceeds from option exercises ........................ -- -- 14,344 Proceeds from exercise of warrants .................... 554,913 -- 648,663 Proceeds of sales of preferred stock .................. -- -- 12,950 Borrowings (repayments) of stockholder loans .......... -- (52,005) 35,120 Preferred stock dividends paid in cash ................ -- (45,833) (185,274) Principal payments on installment note ................ -- (349) (425) ------------ ------------ ------------ Net Cash Provided By Financing Activities ............ 4,887,413 1,115,687 13,430,489 ------------ ------------ ------------ Net Increase (Decrease) In Cash ..... 2,546,413 150,438 3,187,890 Balance at beginning of period ............... 641,477 37,388 -- ------------ ------------ ------------ Balance at end of period ..................... $ 3,187,890 $ 187,286 $ 3,187,890 ============ ============ ============
The accompanying notes are an integral part of these financial statements. 6 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS March 31, 2005 (Unaudited) 1. BASIS OF PRESENTATION The unaudited interim financial statements of AirTrax, Inc. ("the Company") as of March 31, 2005 and for the three month periods ended March 31, 2005 and 2004, respectively, have been prepared in accordance with accounting principles generally accepted in the United State of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the quarter ended March 31, 2005 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2005. Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company included in the Annual Report on Form 10-KSB for the year ended December 31, 2004. 2. CAPITAL STOCK The certificate of incorporation was amended on March 28, 2005 to increase the number of authorized shares to 100,000,000 for the common no par stock, and 5,000,000 for the preferred no par stock. 7 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS March 31, 2005 (Unaudited) 3. COMMON STOCK AND WARRANTS On February 11, 2005, the Company issued $5,000,000 of 6% convertible promissory notes, which were convertible into Company common stock and two classes of warrants to purchase Company common stock. The notes were to mature on August 10, 2005. The Company retained the right to require conversion of the notes at a price of $1.30 per share. Conversion occurred on March 29, 2005 and 3,846,154 shares of common stock were issued. In addition, warrants to purchase common stock were issued in connection with this transaction as follows: 1,923,077 Class A warrants and 961,538 Class B warrants. The Class A warrants are exercisable for a five year period at a price per share of $1.85; the Class B warrants are exercisable for a five year period at a price per share of $2.11. As partial compensation, the broker-dealer which arranged this transaction was awarded 384,616 warrants to purchase common stock at $1.85 per share. A total of 8,144,852 warrants was outstanding at March 31, 2005, as follows: Other Class A Class B Warrants --------- ------- ---------- Outstanding at December 31, 2004 5,537,763 Issued in connection with conversion of convertible notes 1,923,077 961,538 384,616 --------- ------- ---------- 1,923,077 961,538 5,922,379 Reductions during quarter: Warrants exercised (462,142) Warrants voided (200,000) --------- ------- ---------- 1,923,077 961,538 5,260,237 ---------- 8,144,852 ========== A total of 6,126,873 shares of common stock was issued during the first quarter of 2005, as follows: Conversion of $5,000,000 notes 3,846,154 Private placement sales 68,750 Shares issued based on warrants exercised 462,142 Issuance of shares sold in prior year 1,749,827 --------- Total shares issued 6,126,873 ========= 8 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS March 31, 2005 (Unaudited) 4. SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest was $4 and $2,735 respectively, for the quarters ended March 31, 2005, and March 31, 2004. There was no cash paid for income taxes during either the 2005 or 2004 quarters. Shares of common stock sold during 2004 were issued during 2005. Proceeds of these stock sales were $1,403,174. 5. OPERATING AND ADMINISTRATIVE EXPENSES The following expenses are unaudited 3 Months Ended 3 Months Ended 3/31/05 3/31/04 -------------- -------------- Officer's Compensation $ 83,650 $ - Salaries 121,594 67,270 Marketing Expense 133,012 7,459 Production Costs 100,903 16,350 Professional Fees 118,364 32,607 Consulting-Administrative 5,113 51,250 Consulting-Marketing - 75,000 Other Expenses 160,958 48,873 ----------- ---------- Totals $723,594 $298,809 =========== ========== 9 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS March 31, 2005 (Unaudited) 6. CONTINGENCIES The Company has a tentative agreement to purchase 75.1% of the stock of FiLCO GmbH (FiLCO)., a German manufacturer of fork trucks with a manufacturing facility in Mulheim, Germany. During the pendency of this tentative agreement, the Company agreed to make advances to FiLCO. Through March 31, 2005, loans totaling $3,825,000 had been made. Under the provisions of the tentative agreement, advances of $1,300,000 would be converted to FiLCO capital and the seller, who will continue to own the remaining 24.9% of the FiLCO stock, would convert to FiLCO capital a loan of 1,225,000 Euros that FiLCO owes to him. As additional consideration for this FiLCO stock purchase, the Company agreed to pay the seller 12,750 Euros and to issue to the seller 900,000 warrants to purchase Company stock; these warrants would be exercisable at $.01 per share. The Company has appointed the seller of the FiLCO stock a director of the Company and will grant him options to purchase 100,000 shares of Company stock for $.01. Additionally, the Company agreed to advance funds, if needed, to FiLCO to provide for its working capital needs. Any advances made under the latter provision would be collateralized by the remaining 24.9% of FiLCO stock and would be repaid only from dividends paid on the stock. As of March 31, 2005, the Company had not concluded the contract and had not issued any of the warrants or options contemplated by the tentative agreement. 10 Item 2. Management's Discussion and Analysis and Results of Operations Forward Looking Statements This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such should not be regarded as a representation by AIRTRAX, Inc., or any other person, that such forward-looking statements will be achieved. The business and operations of AIRTRAX, Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report. Overview Since 1995, substantially all of our resources and operations have directed towards the development of the omni-directional wheel and related components for forklift and other material handling applications. Many of the components, including the unique shaped wheels, motors, and frames, have been specially designed by us and specially manufactured for us. Four pilot models of the commercial omni-directional lift truck are operational and have been used for extensive testing over the past few years. We have completed our initial production run consisting of 10 units of our Sidewinder ATX-3000 Omni-Directional Lift Truck. Two of these vehicles have been sold to consumers while several of the other eight trucks will be used for additional testing including UL (Underwriters Laboratories) compliance. Unit assembly for the first 10 units was completed by us at the H&R Industries facility in Warminster, PA. ANSI testing is completed using specified mast and will be continued throughout the second and third quarters on optional mast to be used with this vehicle. Final UL compliance must be completed at the plant of initial and final assembly. Following required compliance testing, we expect to sell the remainder these units to select dealers in the United States. We have received orders for these units. We have incurred losses and experienced negative operating cash flow since our formation. For the three months ended March 31, 2005 and 2004, we had a net loss of $(619,811) and $(280,454), respectively. We expect to continue to incur significant expenses. Our operating expenses have been and are expected to continue to outpace revenues and result in significant losses in the near term. We may never be able to reduce these losses, which will require us to seek additional debt or equity financing. Our principal executive offices are located at 870B Central Avenue, Hammonton, NJ 08037 and our telephone number is (609) 567-7800. We are incorporated in the State of New Jersey. Company History We were incorporated in the State of New Jersey on April 17, 1997. On May 19, 1997, we entered into a merger agreement with a predecessor company that was incorporated on May 10, 1995. We were the surviving company in the merger. Effective November 5, 1999, we merged with MAS Acquisition IX Corp ("MAS"), and were the surviving company in the merger. Pursuant to the Agreement and Plan of Merger, as amended, each share of common stock of MAS was converted to 0.00674 shares of our company. After giving effect to fractional and other reductions, MAS shareholders received 57,280 of our shares as a result of the merger. Results of Operations - Three Months Ended March 31, 2005 compared with Three Months Ended March 31, 2004 We have been a development stage company for the periods ended March 31, 2005 and 2004 and have not engaged in full-scale operations for the periods indicated. The limited revenues for the periods have been derived from the first sales of the Sidewinder Omni-Directional Lift Truck. During 2005, we expect to transition from a development stage company to an operating company as we begin production and sales of the Sidewinder Omni-Directional Lift Truck. Consequently, management believes that the year-to-year comparisons described below are not indicative of future year-to-year comparative results. Revenues. For the three-month period ended March 31, 2005, the Company had sales revenue of $76,991. This compares to revenues of $0 for the three months ended March 31, 2004. The increase in sales revenue represents the first sales of the SIDEWINDER Omni-Directional Lift Truck. Cost of Goods Sold. The Company's cost of goods sold for the three months ended March 31, 2005 amounted to $52,361. For the three months ended March 31, 2004, the Company's cost of goods sold was $0. The Company's $52,361 cost of goods sold reflects the cost of the lift trucks sold during the three months ended March 31, 2005. 11 The Company is entitled to a benefit for the effect on income taxes on the net operating loss. Accordingly, a benefit in the amount of $58,145 has been recorded for the first quarter of 2005 and $25,959 was recorded during the first quarter of 2004. Operating and Administrative Expenses. Operating and administrative expenses includes administrative salaries and overhead. For the three months ended March 31, 2005, the Company's operating and administrative expenses totaled $723,594. Operating and administrative expenses totaled $298,809 for the three months ended March 31, 2004. For the three months ended March 31, 2005 operating and administrative expenses increased $424,785 compared with the same period of 2004. These changes are a result of the time and material costs preparing for production of the SIDEWINDER and other production related issues. Loss Before Income Taxes. Loss before income taxes for the three month period ended March 31, 2005 totaled $677,956. For the three months ended March 31, 2004, loss before income taxes totaled $306,413. The increase in loss before income tax for the three months ended March 31, 2005 compared with the same period of 2004 was caused by the time and material allocations preparing for production of the SIDEWINDER and other production related issues. Preferred Stock Dividends. During the three months ended March 31, 2005, the Company paid no dividends on preferred stock. During the three months ended March 31, 2004, the Company paid dividends on preferred stock in the amount of $45,833. The preferred stock dividends are payable to a company that is owned by the Company's President. Liquidity and Capital Resources - Three Months Ended March 31, 2005 compared with Three Months Ended March 31, 2004 As of March 31, 2005, the Company's cash on hand was $3,187,890 and working capital was $3,930,139. Since its inception, the Company has financed its operations through the private placement of its common stock. During the three months ended March 31, 2005, the Company sold an aggregate of 3,914,904 shares of common stock to accredited and institutional investors. During the three months ended March 31, 2004, the Company sold an aggregate of 1,831,250 shares of common stock to accredited and institutional investors and issued an aggregate of 93,745 shares of common stock in consideration for services rendered. The Company anticipates that its cash requirements for the foreseeable future will be significant. In particular, management expects substantial expenditures for inventory, production, and advertising in anticipation of the rollout of its omni-directional forklift. The Company expects that it will be required to raise funds through the private or public offering of its securities. The Company's initial production run of ten SIDEWINDER Omni-Directional Lift Trucks was completed in the first quarter of 2005. The Company will need additional funds to support production requirements beyond the initial production run of its forklift which are estimated to be $2,000,000. Of the total amount, approximately 75% is projected for parts and component inventory and manufacturing costs, with the balance projected as general operating expenditures, which includes overhead and salaries. The Company also will require additional funds to complete the proposed acquisition of the 75.1% interest in Filco GmbH ("Filco"), primarily for Filco's working capital needs. As of March 31, 2005, the Company has loaned to Filco a total of $3,825,000. The Company intends to complete the acquisition of Filco once operating capital for Filco is secured to finance their operations. The Company will lease facilities starting in the second quarter of 2005 as corporate headquarters. This building will also facilitate the assembly of the SIDEWINDER and other omni-directional products, partial assembly of Filco lift trucks, if the proposed acquisition is completed, warranty work, and product distribution. The Company currently rents or leases space at Warminster PA and Flemington NJ. These leases and/or rentals will be terminated as the workload permits. As of March 31, 2005, our working capital was $3,930,139. Fixed assets, net of accumulated depreciation, and total assets, as of March 31, 2005, were $92,470 and $8,921,961, respectively. Current liabilities as of March 31, 2005 were $944,317. Item 3. Controls and Procedures As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 12 Part II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On February 11, 2005, we entered into a Subscription Agreement (the "Subscription Agreement") pursuant to which we sold an aggregate of $5,000,000 of principal amount promissory notes (the "Notes") convertible into shares of our common stock, no par value, and Class A and Class B share purchase warrants (the "Warrants") to purchase shares of our common stock to certain purchasers who are a party to the Subscription Agreement (the "Purchasers"). The Notes mature on August 10, 2005 and pay simple interest accruing at the annual rate of 6%, either in the form of common stock, which shall be valued at the conversion price in effect at the maturity date, or cash, each at our option. The Notes are convertible into shares of our common stock at a conversion price equal to $1.30, subject to adjustment in certain events, including, without limitation, upon our consolidation, merger or sale of all of substantially all of our assets, a reclassification of our common stock, or any stock splits, combinations or dividends with respect to our common stock. On March 29, 2005, after the Company obtained stockholder approval to increased the Company's authorized common stock to 100 million shares, the Company converted all of the Notes into stock pursuant to the Subscription Agreement. Interest earned as of March 29, 2005 amounted to $36,986. As a result thereof, the Company will issue the Purchasers a total of 28,451 shares of common stock in lieu of $36,986 in cash for interest due thereunder. In addition, we issued an aggregate of 1,923,077 Class A Warrants and 961,538 Class B Warrants, representing 50 Class A Warrants and 25 Class B Warrants for each 100 shares of common stock which would be issued on the closing date assuming the complete conversion of the Notes issued on the closing date at the conversion price in effect on the closing date. The Class A Warrants are exercisable at a price equal to $1.85 from the date of issuance until 5 years after the closing date. The Class B Warrants are exercisable at a price equal to $2.11, representing 101% of the 3-day average closing bid prices of our common stock on the trading day immediately preceding the closing date, from the date of issuance until 5 years after the closing date. The Class A and Class B Warrants both have a cashless feature, only if the Registration Statement required to be filed pursuant to the financing is not available during the time that such Registration Statement is required to be effective. First Montauk Securities Corp. (the "Selling Agent") acted as selling agent in connection with the offering. We issued a total of 384,616 Warrants on February 11, 2005 to the Selling Agent. On September 14, 2004, options to purchase 25,000 shares of common stock were exercised by Nicholas Fenelli under the terms of his Employment Agreement with the Company. This stock was issued on March 29, 2005. On March 29, 2005, the Company issued 6,174 shares of common stock to certain of its vendors as payment for services performed on behalf of the Company. These shares were earned on June 25, 2004 and September 15, 2004. The issuance of the common stock, Notes, Warrants and options was exempt from registration requirements of the Securities Act of 1933 pursuant to Section 4(2) of such Securities Act and Regulation D promulgated thereunder based upon the representations of each of the Purchasers that it was an "accredited investor" (as defined under Rule 501 of Regulation D) and that it was purchasing such securities without a present view toward a distribution of the securities. In addition, there was no general advertisement conducted in connection with the sale of the securities. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders 1. A Special Meeting of the Company's Stockholders was held on March 28, 2005 at 9:30 a.m. eastern time, at the Ramada Inn, 2216 West Landis Avenue, Vineland, New Jersey 08360. 2. There were present in person or by proxy 18,137,092 voting shares comprised of common stock, of a total of 15,387,092 shares of common stock entitled to vote as of the February 16, 2005 record date, and 275,000 shares of preferred stock entitled to vote. 13 The Company's common stock and preferred stock were the only classes of voting securities of the Company. The Company's common stock was entitled to one vote per share and the holder of shares of preferred stock were entitled to 10 votes per share. 3. 15,203,441 shares were voted in favor of the amendment to our certificate of incorporation to increase the number of authorized shares of common stock of the Company from 20,000,000 shares to 100,000,000 shares; 4. 8,050,353 shares were voted in favor of the amendment to our certificate of incorporation to increase the authorized shares of the Company's "blank check" preferred stock from 500,000 to 5,000,000 shares; and 5. 15,131,899 shares were voted in favor of the amendment to our certificate of incorporation to provide, to the fullest extent permitted by New Jersey law, that the Company's directors or officers shall not be personally liable to the Company or its shareholders for damages for breach of such director's or officer's fiduciary duty. Item 5. Other Information None. Item 6. Exhibits (a) Exhibits. 3.1 Certificate of Incorporation of Airtrax, Inc. dated April 11, 1997. (Filed as an exhibit to the Company's Form 8-K filed with the Securities and Exchange Commission on November 19, 1999). 3.2 Certificate of Correction of the Company dated April 30, 2000 (Filed as an exhibit to Company's Form 8-K filed with the Securities and Exchange Commission on November 17, 1999). 3.3 Certificate of Amendment of Certificate of Incorporation dated March 19, 2001 (Filed as an exhibit to Company's Form 8-K filed with the Securities and Exchange Commission on November 17, 1999). 3.4 Certificate of Amendment of Certificate of Incorporation dated April 1, 2005 (Filed herewith). 3.5 Amended and Restated By-Laws of the Company. (Filed as an exhibit to the Company's Form 8-K filed with the Securities and Exchange Commission on November 19, 1999). 4.1 Form of Common Stock Purchase Warrant issued to investors pursuant to the May 2004 private placement. (Filed previously) 4.2 Form of Common Stock Purchase Warrant dated as of November 22, 2004 and November 23, 2004. (Filed as an exhibit to the Company's Form 8-K filed with the Securities and Exchange Commission on November 30, 2004). 10.1 Agreement and Plan of Merger by and between MAS Acquisition IX Corp. and Airtrax , Inc. dated November 5, 1999. (Filed as an exhibit to the Company's Form 8-K filed with the Securities and Exchange Commission on January 13, 2000). 10.2 Employment agreement dated April 1, 1997 by and between the Company and Peter Amico. (Filed as an exhibit to the Company's Form 8-K/A filed with the Securities and Exchange Commission on January 13, 2000). 10.3 Employment agreement dated July 12, 1999, by and between the Company and D. Barney Harris. (Filed as an exhibit to the Company's Form 8-K/A filed with the Securities and Exchange Commission on November 19, 1999). 10.4 Consulting Agreement by and between MAS Financial Corp. and Airtrax, Inc. dated October 26, 1999. (Filed as exhibit to the Company's Form 8-K filed with the Securities and Exchange Commission on November 19, 1999). 10.5 Employment Agreement effective July 1, 2002 by and between the Company and Peter Amico (filed as an exhibit to the Company's Form 10-KSB for the period ended December 31, 2002) 10.6 Agreement dated July 15, 2002 by and between the Company and Swingbridge Capital LLC and Brian Klanica. (Filed as an exhibit to the Company's Form 8-K filed on August 7, 2002). 14 10.7 Purchase Agreement, dated November 22, 2004, by and among Airtrax, Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership, Whalehaven Capital Fund. (Filed as an exhibit to the Company's Form 8-K filed on November 30, 2004). 10.8 Joinder to the Purchase Agreement, dated November 23, 2004, by and among Airtrax, Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership and Linda Hechter. (Filed as an exhibit to the Company's Form 8-K filed on November 30, 2004). 10.9 Registration Rights Agreement, dated November 22, 2004, by and among Airtrax, Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership, Whalehaven Capital Fund and First Montauk Securities Corp. (Filed as an exhibit to the Company's Form 8-K filed on November 30, 2004). 10.10 Joinder to the Registration Rights Agreement, dated November 23, 2004, by and among Airtrax, Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership, Linda Hechter and First Montauk Securities Corp. (Filed as an exhibit to the Company's Form 8-K filed on November 30, 2004). 10.11 Subscription Agreement, dated February 11, 2005, by and among Airtrax, Inc. and the investors named on the signature page thereto (Filed as an exhibit to the Company's Form 8-K filed on February 11, 2005). 10.12 Form of Series A Convertible Note of Airtrax, Inc. dated as of February 11, 2005 (Filed as an exhibit to the Company's Form 8-K filed on February 11, 2005). 10.13 Form of Class A Common Stock Purchase Warrant of Airtrax, Inc. dated as of February 11, 2005 (Filed as an exhibit to the Company's Form 8-K filed on February 11, 2005). 10.14 Form of Class B Common Stock Purchase Warrant of Airtrax, Inc. dated as of February 11, 2005 (Filed as an exhibit to the Company's Form 8-K filed on February 11, 2005). 31.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Section 302 (filed herewith). 32.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith). 15 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 16th day of May 2005. AIRTRAX, INC. By:/s/ Peter Amico --------------- Peter Amico, Chief Executive Officer, Principal Financial Officer and Chairman 16 EX-3 2 mar31200510qsbex34.txt EXHIBIT 3.4 New Jersey Division of Revenue Certificate of Amendment to the Certificate of Incorporation (For Use by Domestic Profit Corporations) Pursuant to the provisions of Section 14A:9-2 (4) and Section 14A:9-4 (3), Corporations, General, of the New Jersey Statutes, the undersigned corporation executes the following Certificate of Amendment to its Certificate of Incorporation: 1. The name of the corporation is: Airtrax, Inc. 2. The following amendment to the Certificate of Incorporation was approved by the directors and thereafter duly adopted by the shareholders of the corporation on the 28th day of March, 2005 Resolved, that Article 5. of the Certificate of Incorporation be amended to read as follows: "5. The aggregate number of shares which the corporation shall have the authority to issue is one hundred five million (105,000,000), itemized by classes, par value of shares, shares without par value, and series, if any, within a class, is: Par value per Share or statement that Shares Class Series (if any) Number of Shares have no par value - ----- ------------- ---------------- ---------------------- Common 100,000,000 No par Preferred 5,000,000 No par The relative rights, preferences and limitations of the shares of each class and series (if any), are as follows: The preferred stock, or any series thereof, shall have such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall be expressed in the resolution or resolutions providing for the issue of such stock adopted by the Board of Directors and may be made dependent upon facts ascertainable outside such resolution or resolutions of the Board of Directors, provided that the matter in which such facts shall operate upon such designations, preferences, rights and qualifications; limitations or restrictions of such class or series of stock is clearly and expressly set forth in the resolution or resolutions providing for the issuance of such stock by the Board of Directors." 3. The number of shares outstanding at the time of the adoption of the amendment was: 15,387,092 shares of common stock, 275,000 shares of preferred stock. The total number of shares entitled to vote thereon was: 15,662,092. If the shares of any class or series of shares are entitled to vote thereon as a class, set forth below the designation and number of outstanding shares entitled to vote thereon of each such class or series. (Omit if not applicable). The holders of the preferred stock are entitled to cast 10 votes per share. 4. The number of shares voting for and against such amendment is as follows: (If the shares of any class or series are entitled to vote as a class, set forth the number of shares of each such class and series voting for and against the amendment, respectively). Number of Shares Voting for Amendment Number of Shares Voting Against Amendment - ------------------------------------- ----------------------------------------- 23,024,034 160,212 5. If the amendment provides for an exchange, reclassification or cancellation of issued shares, set forth a statement of the manner in which the same shall be effected. (Omit if not applicable). 6. Other provisions: (Omit if not applicable). Resolved, that new Article 8. of the Certificate of Incorporation be inserted to read as follows: "8. The personal liability of an officer or director to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as an officer or director is hereby eliminated, to the fullest extent permitted under the New Jersey Statutes, provided that this Article shall not eliminate or limit the liability of an officer or director (i) for any breach of the officer's or director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which the officer or director derived an improper personal benefit." Number of Shares Voting for Amendment Number of Shares Voting Against Amendment - ------------------------------------- ----------------------------------------- 15,025,019 138,673 BY:/s/ Peter Amico ------------------ Peter Amico Dated this 1st day of April, 2005 EX-31 3 mar31200510qsbex311.txt Exhibit 31.1 CERTIFICATION I, Peter Amico, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Airtrax, Inc. for the quarter ended March 31, 2005; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. May 16, 2005 /s/ Peter Amico - --------------- Peter Amico Chief Executive Officer and Principal Financial Officer EX-32 4 mar31200510qsbex321.txt Exhibit 32.1 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 Airtrax, Inc. (the "Company") on Form 10-QSB for the quarter ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter Amico, Chief Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and 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. A signed original of this written statement required by Section 906 has been provided to Airtrax, Inc. and will be retained by Airtrax, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. May 16, 2005 /s/ Peter Amico - -------------- Peter Amico Chief Executive Officer and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----