-----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, OC74lVPeQNQXwPTnCGo7qD9Y3Y6WeNRGVl3wfwX1ldnrgDm11xXGiR1dCGuWq3jp vn9OWihKXeVv/gwY3rY35Q== 0001013762-05-001553.txt : 20051114 0001013762-05-001553.hdr.sgml : 20051111 20051114163330 ACCESSION NUMBER: 0001013762-05-001553 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 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: 051202057 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 sep30200510qsb.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 September 30, 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 200 Freeway Drive, Unit One, Blackwood, NJ 08012 (Address of principal executive offices) (856) 232-3000 (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 [X] No [ ] Indicate by check whether the registrants is a shell company (as defined in rule 12b of the Exchange Act). Yes [ ] No [X] 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 October 31, 2005, the issuer had 21,928,674 shares of common stock, no par value, issued and outstanding. Transitional Small Business Issuer Format (Check One): Yes [ ] No [X] AIRTRAX, INC. SEPTEMBER 30, 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 8 Notes to Financial Statements 9 Special Note Regarding Forward Looking Statements 11 Item 2. Management's Discussion and Analysis or Plan of Operations 13 Item 3. Controls and Procedures 18 PART II - OTHER INFORMATION Item 1. Legal Proceedings 19 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Submission of Matters to a Vote of Security Holders 19 Item 5. Other Information 19 Item 6. Exhibits 19 SIGNATURES 22 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AIRTRAX, INC. (A Development Stage Company) FINANCIAL STATEMENTS SEPTEMBER 30, 2005 (Unaudited) CONTENTS Page ---- Balance Sheets 4 Statements of Operations and Deficit Accumulated During Development Stage 5 Statements of Cash Flows 8 Notes to Financial Statements 9 3 AIRTRAX, INC. (A Development Stage Company) BALANCE SHEETS
September 30, 2005 December 31, 2004 (Unaudited) (Audited) --------------------- --------------------- ASSETS Current Assets Cash $ 40,682 $ 641,477 Accounts receivable 2,421 - Accrued interest receivable 361,912 86,667 Inventory 2,204,373 709,281 Prepaid expenses - 5,113 Vendor advance 173,017 52,017 Deferred tax asset 596,252 224,414 --------------------- --------------------- Total current assets 3,378,657 1,718,969 Fixed Assets Office furniture and equipment 162,051 90,714 Automotive equipment 21,221 21,221 Shop equipment 57,400 24,553 Casts and tooling 239,297 205,485 --------------------- --------------------- 479,969 341,973 Less, accumulated depreciation 275,695 248,386 --------------------- --------------------- Net fixed assets 204,274 93,587 Other Assets Advances to Filco Gmbh 6,255,462 2,670,000 Patents - net 147,601 117,402 Bond discount 416,667 - Utility deposits 65 65 --------------------- --------------------- Total other assets 6,819,795 2,787,467 --------------------- --------------------- TOTAL ASSETS $ 10,402,726 $ 4,600,023 ===================== ===================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 1,258,715 $ 394,959 Accrued liabilities 1,504,195 459,565 Shareholder deposits for stock 70,875 1,403,174 Bank loan 100,000 - Shareholder notes payable 34,474 33,455 --------------------- --------------------- Total current liabilities 2,968,259 2,291,153 Long Term Convertible Debt 500,000 - --------------------- --------------------- TOTAL LIABILITIES 3,468,259 2,291,153 --------------------- --------------------- Stockholders' Equity Common stock - authorized, 100,000,000 shares without par value; issued and outstanding - 21,874,374 and 15,089,342, respectively 20,773,723 10,822,854 Paid in capital - warrants 2,366,339 Preferred stock - authorized, 500,000,000 shares without par value; 375,000 issued and outstanding 545,491 12,950 Deficit accumulated during the development stage (16,544,134) (8,319,982) Deficit prior to development stage (206,952) (206,952) --------------------- --------------------- Total stockholders' equity 6,934,467 2,308,870 --------------------- --------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,402,726 $ 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 Nine Month Periods Ended September 30, (Unaudited)
May 19, 1997 (Date of Inception) to September 2005 2004 30, 2005 --------------- --------------- --------------- SALES $ 167,545 $ -- $ 1,190,668 COST OF GOOD SOLD 160,126 -- 630,497 --------------- --------------- --------------- Gross Profit 7,419 -- 560,171 OPERATING AND ADMINISTRATIVE EXPENSES 3,987,695 1,397,479 12,935,956 --------------- --------------- --------------- OPERATING LOSS (3,980,276) (1,397,479) (12,375,785) OTHER INCOME AND EXPENSE Interest expense (4,374,592) (23,716) (4,549,616) Interest income 291,208 24,091 377,875 Other income 211 131 78,505 --------------- --------------- --------------- NET LOSS BEFORE INCOME TAXES (8,063,449) (1,396,973) (16,469,021) INCOME TAX BENEFIT (STATE): Current 371,838 119,226 371,838 Prior years -- -- 717,142 --------------- --------------- --------------- Total Benefit 371,838 119,226 1,088,980 --------------- --------------- --------------- NET LOSS BEFORE DIVIDENDS (7,691,611) (1,277,747) (15,380,041) DEEMED DIVIDENDS ON PREFERRED STOCK (480,978) -- (669,390) --------------- --------------- --------------- NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS (8,172,589) (1,277,747) (16,049,431) PREFERRED STOCK DIVIDENDS DURING DEVELOPMENT STAGE (51,563) (91,868) (494,703) --------------- --------------- --------------- DEFICIT ACCUMULATED $ (8,224,152) $ (1,369,615) $ (16,544,134) =============== =============== =============== NET LOSS PER SHARE - Basic and Diluted $ (.45) $ (.11) WEIGHTED AVERAGE SHARES OUTSTANDING 18,038,164 11,452,797
The accompanying notes are an integral part of these financial statements. 5 AIRTRAX, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE For the Three Month Periods Ended September 30, (Unaudited)
May 19, 1997 (Date of Inception) to September 2005 2004 30, 2005 --------------- --------------- --------------- SALES $ - $ - $ 1,190,668 COST OF GOOD SOLD - - 630,497 --------------- --------------- --------------- Gross Profit - - 560,171 OPERATING AND ADMINISTRATIVE EXPENSES 1,981,664 549,338 12,935,956 --------------- --------------- --------------- OPERATING LOSS (1,981,664) (549,338) (12,375,785) OTHER INCOME AND EXPENSE Interest expense (86,391) (9,986) (4,549,616) Interest income 118,908 13,964 377,875 Other income - 37 78,505 --------------- --------------- --------------- NET LOSS BEFORE INCOME TAXES (1,949,147) (545,323) (16,469,021) INCOME TAX BENEFIT (STATE): Current 147,392 51,456 371,838 Prior years - - 717,142 --------------- --------------- --------------- Total Benefit 147,392 51,546 1,088,980 --------------- --------------- --------------- NET LOSS BEFORE DIVIDENDS (1,801,755) (493,867) (15,380,041) DEEMED DIVIDENDS ON PREFERRED STOCK - - 669,390 --------------- --------------- --------------- NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS (1,801,755) (493,867) (16,049,431) PREFERRED STOCK DIVIDENDS DURING DEVELOPMENT STAGE - (5,931) (494,703) --------------- --------------- --------------- DEFICIT ACCUMULATED $ (1,801,755) $ (499,798) $ (16,544,134) =============== =============== =============== NET LOSS PER SHARE - Basic and Diluted $ (.08) $ (.04) WEIGHTED AVERAGE SHARES OUTSTANDING 21,740,196 12,888,343
The accompanying notes are an integral part of these financial statements. 7 AIRTRAX, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS ACCUMULATED DURING DEVELOPMENT STAGE For the Nine Month Periods Ended September 30, (Unaudited)
May 19, 1997 (Date of Inception) to September 2005 2004 30, 2005 --------------- --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (8,172,589) $ (1,277,747) $ (16,049,431) Adjustments to reconcile net loss to net cash consumed by operating activities: Charges not requiring the outlay of cash: Depreciation and amortization 32,499 27,159 333,663 Amortization of bond discount 83,333 - 83,333 Equity securities issued for services 1,866,500 623,401 4,805,723 Provision for impairment loss 120,280 - 120,280 Value of warrants issued with convertible debt 944,500 - 944,500 Conversion benefits associated with debt issue 3,269,231 - 3,269,231 Increase in accrual of deferred tax benefit (371,838) (119,226) (596,252) Deemed dividends on preferred stock 480,978 - 669,390 Interest accrued on shareholder loan 3,021 3,775 24,662 Changes in current assets and liabilities: Increase in accrued interest receivable (275,245) (24,081) (361,912) Increase in accounts receivable (2,421) - (2,421) Increase in vendor advances (121,000) - (173,017) Increase (decrease) in accounts payable and accrued liabilities 884,830 (225,888) 1,805,184 Increase in prepaid expenses - - (146,957) Increase in inventory (1,495,092) (131,842) (2,204,373) --------------- --------------- --------------- Net Cash Consumed By Operating Activities (2,753,013) (1,124,449) (7,478,397) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of equipment (137,996) (19,249) (486,280) Additions to patent cost (35,389) (37,686) (193,320) Advances to Filco GmbH (3,247,171) (1,230,000) (5,917,171) --------------- --------------- --------------- Net Cash Consumed By Investing Activities (3,420,556) (1,286,935) (6,596,771) --------------- --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds of issuance of convertible debt 4,277,500 - 4,277,500 Net proceeds of common stock sales 55,000 2,696,462 8,627,611 Proceeds of convertible loan 409,913 - 409,913 Proceeds from exercise of warrants 718,486 - 812,236 Proceeds of bank loan 100,000 - 100,000 Proceeds of sales of preferred stock - - 12,950 Proceeds from exercise of options 13,877 5,944 28,221 Borrowings (repayments) of stockholder loans (2,002) (52,005) 33,118 Preferred stock dividends paid in cash - (91,868) (185,274) Principal payments on installation note - (5,546) (425) --------------- --------------- --------------- Net Cash Provided By Financing Activities 5,572,774 2,552,987 14,115,850 --------------- --------------- --------------- Net (Decrease) Increase In Cash (600,795) 141,603 40,682 Balance at beginning of period 641,477 37,388 - --------------- --------------- --------------- Balance at end of period $ 40,682 $ 178,991 $ 40,682 =============== =============== ===============
The accompanying notes are an integral part of these financial statements. 8 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2005 (Unaudited) BASIS OF PRESENTATION The unaudited interim financial statements of AirTrax, Inc. ("the Company") as of September 30, 2005 and for the three month and nine month periods ended September 30, 2005 and 2004, respectively, have been prepared in accordance with accounting principals generally accepted in the United States 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 three and nine month periods ended September 30, 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 for the year ended December 31, 2004. 2. COMMON STOCK AND WARRANTS The certificate of incorporation was amended on March 28, 2005 to increase the number of authorized shares to 100,000,000 for common no par stock, and to 5,000,000 for preferred no par stock. 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 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, and 100,000 warrants to purchase common stock at $1.00 per share. 9 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2005 (Unaudited) 2. COMMON STOCK AND WARRANTS (CONTINTUED) The issuance of convertible promissory notes and warrants was accounted for as required by Emerging Issues Task Force (EITF) 98-5 "Accounting For Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" and EITF 00-27 "Application of Issue no. 98-5 To Certain Convertible Investments." Accordingly, expense was increased by $944,500 representing the value of the warrants and by $3,269,231 representing the value of the conversion privilege. On May 14, 2005, the Company issued a $500,000 8% convertible note. The note is scheduled for maturity in two years. During that period, it can be converted to stock at a rate of $1.30 per share, which would translate to 384,615 shares. Accompanying the convertible note were 384,615 warrants to purchase common stock at $2.11 per share; these warrants are exercisable over a five year period. A total of 8,536,298 warrants was outstanding at September 30, 2005, as follows:
Other Total Class A Class B Warrants Warrants --------------- --------------- --------------- --------------- Outstanding at December 31, 2004 5,537,763 5,537,763 Issued in connection with sale of $5,000,000 in convertible notes 1,923,077 961,538 484,616 3,369,231 Issued in conjunction with $500,000 of convertible debt 384,615 384,615 Other warrants issued 37,689 37,689 Reductions: Warrants exercised (593,000) (593,000) Warrants voided (200,000) (200,000) --------------- --------------- --------------- --------------- Outstanding, September 30, 2005 1,923,077 1,346,153 5,267,068 8,536,298 =============== =============== =============== ===============
10 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2005 (Unaudited) 2. COMMON STOCK AND WARRANTS (continued) Shares of common stock were issued during the third quarter and first nine months of 2005 as follows:
Third Quarter Nine Months --------------- --------------- Conversion of $5,000,000 notes - 3,846,154 Private placement sales - 68,750 Shares issued based on warrants exercised - 593,000 Shares issued to purchase Filco third pary debt 187,939 187,939 Issuance of shares sold in prior year - 1,749,827 Shares issued for services 46,509 310,909 Shares issued in settlement of interest due on convertible notes - 28,453 --------------- --------------- Total shares issued 234,448 6,785,032 =============== ===============
SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest was $5, 803 and $10,135, respectively, for the nine month periods ended September 30, 2005 and June 30, 2004. There was no cash paid for income taxes during either the 2005 or 2004 nine month periods. There were no noncash investing activities during either the 2005 or 2004 periods. The following noncash financing activities occurred during these periods. a. During the second quarter of 2005, the Company issued 24,853 shares in settlement of the interest obligation on its $5,000,000 convertible issue prior to the conversion of the notes to stock. b. Shares of common stock were issued for services in 2005 and 2004; these totaled 310,909 shares and 192,277 shares, respectively. c. Shares were issued in 2005 and 2004 in settlement of shares paid for in prior years. These amounted to 1,749,827 shares and 30,000 shares, respectively. d. The Company purchased third part debt of Filco for 187,939 shares in 2005. 11 AIRTRAX, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2005 (Unaudited) OPERATING AND ADMINISTRATIVE EXPENSES The following details expenses incurred during the nine month periods ended September 30, 2005 and 2004:
2005 2004 --------------- --------------- Options Expense $ 1,163,838 $ - Payroll 422,680 242,027 Marketing 243,761 67,922 Production Costs 234,639 51,529 Professional Fees 419,710 75,200 Consulting Expenses 524,981 614,079 Insurance 173,633 61,158 Penalties 199,149 - Freight 107,275 3,195 Impairment 120,280 - Other Expenses 377,749 282,369 --------------- --------------- Total Expenses $ 3,987,695 $ 1,397,479 =============== ===============
CONTINGENCY 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 the tentative agreement, the Company has agreed to make advances to FiLCO. Through September 30, 2005, advances totaling $6,255,462 had been made. A portion of these advances may be converted to capital on the books of FiLCO. The seller, who will continue to own the remaining 24.9% of the FiLCO stock, has agreed that if the Company converts $1,220,000 of its advances to capital he will also 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 has 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 upon a closing of the acquisition would grant him as compensation for service as a director 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 that stock. As of September 30, 2005, the Company had not concluded the contract and had not issued any of the warrants or options contemplated by the tentative agreement. 12 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. Ten commercial omni-directional lift trucks carrying the UL Label have been delivered to customers in the United States and Canada as of October 25, 2005 and several others are ready to ship pending receipt of funds or consummation of letters of credit or other credit facilities. We believe that up to a total of 84 units could be manufactured and sold through the fourth quarter of 2005 pending receipt of parts from certain vendors. We have commenced production and have most of the parts required for production of another 74 units of our Sidewinder ATX-3000 Omni-Directional Lift Truck during the 4th quarter of 2005. As of October 27, 2005 we do not have all of the parts required from every vendor for completion of the 74 trucks heretofore noted. The assembly and sale is dependent upon delivery of all of the required parts. Omni-Directional means that vehicles designed and built by us can travel in any direction. Our Omni-directional vehicles are controlled with a joystick. The vehicle will travel in the direction the joystick is pushed. If the operator pushes the joystick sideways, the vehicle will travel sideways. If the operator were to twist the joystick the vehicle will travel in circles. Our omni-directional vehicles have one motor and one motor controller for each wheel. The omni-directional movement is caused by coordinating the speed and direction of each motor with joystick inputs which are routed to a micro-processor, then from the micro-processor to the motor controllers and finally to the motor itself. Complete assembly is conducted by us at our newly leased facilities at 200 Freeway Drive Unit One, Blackwood, NJ 08012. Approximately 50% of the frames are manufactured in the United States. These frames are shipped to the Blackwood plant for complete assembly. In addition to the assembly of vehicles at Blackwood, partially assembled vehicles are shipped to the Blackwood facility from the Filco plant in Germany. To date, partial assembly of approximately 19 lift trucks have been completed at the Filco plant, 14 of which and have been shipped to the USA for final assembly. To date, a total of approximately 80 lift truck frames will be shipped from Bulgaria to the Filco plant for partial assembly and shipped to the Blackwood plant for final assembly during the fourth quarter of 2005. We have incurred losses and experienced negative operating cash flow since our formation. For the three months ended September 30, 2005 and 2004, we had a net loss of $(1,801,755) and $(493,867), respectively. For our fiscal years ended December 31, 2004 and 2003, we had a net loss of $(2,272,200) and $(2,282,946), 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 200 Freeway Drive, Unit One, Blackwood, NJ 08012 and our telephone number is (856) 232-3000. We are incorporated in the State of New Jersey. 13 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. In March 2004, we reached an agreement in principal, subject to certain closing conditions, with Fil Filipov to acquire 51% of the capital stock of Filco GmbH, a German corporation. In April 2003, Filco GmbH acquired substantially all of the assets of Clark Material Handling of Europe GmbH which were located at Clark's facility in Rheinstrasse Mulheim a.d. Ruhr, Germany. These assets consisted of all of the tooling, machinery, equipment, inventory, intellectual property, office furniture and fixtures, and personnel necessary to build the entire Clark line of lift trucks, but excluded the building and land, as well as the rights to the Clark name. Further, Filco GmbH has entered into an 18-month lease agreement with the current property owner with an option to purchase the 200,000 square foot building and land for 4.7 million euros, and Filco GmbH has been operating this plant since July 1, 2003. In October 2004, Mr. Filipov and we agreed to modify our agreement in principal so as to increase the number of shares of the capital stock of Filco GmbH which we will acquire, if we finalize the acquisition, from 51% to 75.1%. The purpose of this change is to give us control of Filco GmbH in accordance with USGAAP and German law considerations regarding consolidation and capitalization. Further, this change was offered and accepted in consideration of our agreeing to advance Filco additional funds, in the form of a loan, to fund the start up of the Filco operation prior to the consummation of the transaction. All other conditions and terms of the agreement between the parties shall remain the same. We have not yet finalized nor executed the acquisition agreement but have loaned Filco GmbH an aggregate principal amount of $6,255,462 as of September 30, 2005 pursuant to a series of secured and unsecured promissory notes. We have used proceeds from the private placement offerings that we completed during 2004 and 2005 to fund such loans. Our analysis shows that additional estimated working capital needs during the next year will be approximately $5,000,000, with $1,750,000 needed during November 2005, in order for it to achieve profitable operations. Should we complete the acquisition of Filco GmbH, we will need to raise additional capital or proper lines of credit in order to fund the working capital needs of Filco GmbH. In general, the Filco transaction could provide us access to strategic partnerships in personnel and successful business ventures, sales and market exposure in Europe. The proposed acquisition of Filco may include a leased manufacturing facility, with an experienced workforce, inventory, intellectual property, and machinery sufficient to fill 200,000 square feet of assembly and manufacturing. Filco could provide us with cliental throughout Europe and the Middle East. This could provide us with the ability to sell a complete line of lift trucks beyond the limited sized Sidewinder Omni-Directional Lift Truck. It would provide manufacturing or assembly for our products, including, but not limited to, the aerial work platforms or any other products we develop or can contract to assemble with other companies. 14 In addition, if the acquisition is completed we anticipate that we will establish manufacturing capability in Europe, to complement our manufacturing in the United States. We currently purchase a high percentage of our parts in Europe, including, but not limited to, the frames from Bulgaria, motors and controllers manufactured in the Czech Republic and Sweden, and transmissions, brakes and seats manufactured in Germany. The mast could be manufactured, the frames could be powder coated (painted), and European parts could be assembled at the Filco plant. Partially assembled vehicles would be shipped to the United States for final assembly. Wheels and other parts for the vehicles may be sold in Europe or Middle Eastern countries could be shipped from the United States for the completion of manufacturing at Filco. We believe we could cut manufacturing costs because our material handling equipment could be manufactured in the continent in which it is sold, i.e., Europe. With our manufacturing capabilities in the United States, this potential acquisition would allow a portion of the Sidewinder becoming assembled and manufactured in each of the two continents that purchase and use about 70% of all material handling equipment worldwide. The primary objective that must be achieved to reach the aforementioned goal(s) is to secure the necessary financing required to fund the acquisition and manufacturing objectives of Filco and us. There can be no assurance that we will be able to raise sufficient capital necessary to complete the acquisition and fund the manufacturing objectives of Filco and us. Loans to Filco GmbH From May 5, 2003 through September 2, 2003, we loaned Filco $365,435 to acquire our initial interest in Filco. Such funds were provided in the form of a loan because we were not able to come up with sufficient funding to acquire our initial interest. Filco repaid principal and interest under this loan to us. In March of 2004, a tentative agreement was negotiated with the principals of Filco in connection with the proposed acquisition. Our management determined to provide Filco limited funding in the form of loans, until financing could be obtained which would help guarantee that the operating capital needed for Filco operations could, in fact, be obtained. The tentative agreement reached with Filco provided that we would take a 51% controlling ownership interest in Filco. The tentative agreement required that we provide $1.3 million to be allocated in the form of equity in Filco and Filipov would also capitalize 1.3 million Euros that he had loaned Filco. The tentative agreement required that we secure a guaranteed credit line for Filco of not less than $5 million to be used as operating capital. However, once we complete the acquisition, we are responsible to provide adequate operating capital to insure a successful business. A later addendum to the tentative agreement stated that we would acquire 75.1% controlling ownership interest in Filco. The amounts loaned to Filco to date, in the aggregate amount of $6,255,462, even if unrecoverable, would not prevent us from commencing the manufacture of the Sidewinder Omni-Directional Lift Truck. The manufacture and sale of omni-directional material handling equipment is our primary goal. During the first, second and third quarters of 2005, we realized limited revenues from sales of the Sidewinder Omni-Directional Lift Truck. We believe that our secured and unsecured loans to Filco are recoverable if the proposed acquisition is not completed. Should Filco default with loan repayment, if such payment were due and requested, it would be much easier to put Filco into bankruptcy in Germany than it would be in the United States. Should Filco be put into bankruptcy, we, as the largest creditor, would be in position to do a legal takeover through bankruptcy administrators. We loaned Filco approximately $2.7 million through the end of 2004 and loaned a total of $6,255,462 as of September 30, 2005. We intend to provide another $5 million to Filco, either in the form of guaranteed credit lines or through additional sales of our securities. Filco GmbH's Financial Condition The improvement of Filco's financial condition and results of operations, as set forth below, furthers our belief that we would be able to recover principal and interest due under our unsecured loans to Filco in the event that the proposed acquisition is not completed. 15 Filco manufactured approximately 550 lift trucks in 2003 and very limited numbers in 2004. In 2004, Filco did not have adequate operating capital to conduct business operations and had numerous issues with its worker's union to resolve. It was and is considered by Filco's management, a better long term negotiating tactic with unions to threaten to close the facility completely than to attempt to run the facility during negotiations. For this reason as well as the lack of funding, Filco's plant was closed for much of 2004 and the beginning of 2005. Filco reached accord with the union on March 30, 2005. Employees will be required to work a 40-hour week instead of 35 prior to additional hires. Wages have been decreased 20%. The resolution of the problems Filco was experiencing with its union is critical to the future success of the company. In addition, the loans that we granted to Filco as of the date hereof have created considerable improvements in Filco's financial condition and results of operations. As a result of the above, Filco recommenced very limited production of standard forklifts during the second quarter of 2005. In April 2005, Filco shipped at least 14 re-conditioned vehicles. In addition, Filco began the assembly of a Russian tractor for distribution in Europe. This agreement calls for the production of 700 units to be assembled each year at a price of 2,800 Euros each. After the prototypes, large quantities of tractors will be assembled. It is expected that volume assembly will commence early 2006. The Russian company will supply all parts. It is anticipated that Filco will be in full forklift production early in the 4th quarter of 2005. The final production schedule is contingent upon supply of parts from various venders. RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2004. We have been a development stage company for the periods ended September 30, 2005 and 2004 and have not engaged in full-scale operations for the periods indicated. 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 September 30, 2005, the Company had sales revenue of $-0-. This compares to revenues of $-0- for the three months ended September 30, 2004. The lack of sales revenue occurred as a result of moving the location of operations to 200 freeway Drive, Unit One, Blackwood, NJ and that time required to get the plant situated and operational. Cost of Goods Sold The Company's cost of goods sold for the three months ended September 30, 2005 amounted to $0-. For the three months ended September 30, 2004, the Company's cost of goods sold was $-0-. 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 $147,392 has been recorded for the third quarter of 2005 and $51,456 was recorded during the third quarter of 2004. Operating and Administrative Expenses Operating and administrative expenses includes administrative salaries and overhead. For the three months ended September 30, 2005, the Company's operating and administrative expenses totaled $1,981,664. Operating and administrative expenses totaled $549,338 for the three months ended September 30, 2004. For the three months ended September 30, 2005 operating and administrative expenses increased $1,432,326 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 including labor and materials used to outfit the new Airtrax assembly plant in Blackwood NJ. Research and Development We had no research and development costs for the three months ended September 30, 2005. Loss Before Income Taxes Loss before income taxes for the three month period ended September 30, 2005 totaled $1,949,147. For the three months ended September 30, 2004, loss before income taxes totaled $545,283. The increase in loss before income tax for the three months ended September 30, 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 including labor and materials used to outfit the new Airtrax assembly plant in Blackwood NJ. 16 Preferred Stock Dividends During the three months ended September 30, 2005, the Company paid $-0- in dividends on preferred stock. During the three months ended September 30, 2004, the Company paid dividends on preferred stock in the amount of $5,931. The preferred stock dividends are payable to a company that is owned by our President. RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2004 We have been a development stage company for the nine months ended September 30, 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 nine-month period ended September 30, 2005, the Company had sales revenue of $167,545. This compares to revenues of $-0- for the nine months ended September 30, 2004. The lack of sales revenue occurred as a result of moving the location of operations to 200 freeway Drive, Unit One, Blackwood, NJ and that time required to get the plant situated and operational. Cost of Goods Sold The Company's cost of goods sold for the nine months ended September 30, 2005 amounted to $160,126. For the nine months ended September 30, 2004, the Company's cost of goods sold was $-0-. The Company's cost of goods sold reflects the cost of the lift trucks sold during the nine months ended September 30, 2005. 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 $371,838 has been recorded for the nine months ended September 30, 2005 and $119,226 was recorded during the nine months ended September 30, 2004. Operating and Administrative Expenses Operating and administrative expenses includes administrative salaries and overhead. For the nine months ended September 30, 2005, the Company's operating and administrative expenses totaled $3,987,695. Operating and administrative expenses totaled $1,397,479 for the nine months ended September 30, 2004. For the nine months ended September 30, 2005 operating and administrative expenses increased $2,590,216 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 including labor and materials used to outfit the new Airtrax assembly plant in Blackwood NJ. Research and Development We had no research and development costs for the nine months ended September 30, 2005. Loss Before Income Taxes Loss before income taxes for the nine month period ended September 30, 2005 totaled $8,063,449. For the nine months ended September 30, 2004, loss before income taxes totaled $1,396,973. The principal reason for the increase in loss before income taxes for the nine months ended September 30, 2005 compared with the same period of 2004 was two amounts charged to interest expense which totaled $4,213,731. These charges stemmed from the convertible bond issue and are described in Note 3 to the financial statements. Other factors contributing to the increase in the 2005 loss were time and materials devoted to preparing for production of the SIDEWINDER and preparing the new assembly plant in Blackwood, New Jersey. 17 Preferred Stock Dividends During the nine months ended September 30, 2005, the Company paid $ 51,563 on preferred stock. During the nine months ended September 30, 2004, the Company paid dividends on preferred stock in the amount of $91,868 The preferred stock dividends are payable to a company that is owned by our President. Liquidity and Capital Resources As of September 30, 2005, the Company's cash on hand was $40,682 and working capital was $410,398. Since its inception, the Company has financed its operations through the private placement of its common stock. During the nine months ended September 30, 2005, the Company sold an aggregate of 68,750 shares of common stock to accredited and institutional investors. During the three months ended September 30, 2004, the Company sold an aggregate of 0 shares of common stock to accredited and institutional investors and issued an aggregate of 46,509 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 $10,000,000. Of the total amount, approximately 25% is projected for parts and component inventory and manufacturing costs, with the balance projected as general operating expenditures, which includes overhead and salaries and the 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 September 30, 2005, the Company had loaned to Filco a total of $6,255,462. The Company intends to complete the acquisition of Filco once operating capital for Filco is secured to finance their operations. The Company leased 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. As of September 30, 2005, our working capital was $410,398. Fixed assets, net of accumulated depreciation, and total assets, as of September 30, 2005 and 2004, were $204,274 and $10,402,726, respectively. Current liabilities as of September 30, 2005 were $2,968,259. 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. 18 Part II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On July 1, 2005 we issued options to purchase an aggregate of 750,000 shares of our common stock at an exercise price of $.85 per share to certain of our employees and consultants as compensation for services performed on our behalf. On August 25, 2005 we issued an aggregate of 187,939 shares of our common stock in satisfaction of an aggregate of $338,291 of debt owed by Filco GmbH. The issuance of the aforementioned securities 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 None. 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 as an exhibit to Company's Form 10-QSB filed with the Securities and Exchange Commission on May 16, 2005). 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). 19 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). 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). 10.15 Series B Unsecured Convertible Debenture and Warrants Purchase Agreement, dated May 31, 2005, by and between Airtrax, Inc. and the investor named on the signature page thereto (Filed as an exhibit to the Company's Form 8-K filed on June 6, 2005). 10.16 Registration Rights Agreement dated May 31, 2005, by and between Airtrax, Inc. and the investor named on the signature page thereto (Filed as an exhibit to the Company's Form 8-K filed on June 6, 2005). 20 10.17 Series B Unsecured Convertible Debenture of Airtrax, Inc. (Filed as an exhibit to the Company's Form 8-K filed on June 6, 2005). 10.18 Form of Stock Purchase Warrant of Airtrax, Inc. (Filed as an exhibit to the Company's Form 8-K filed on June 6, 2005). 10.19 Letter Agreement dated May 31, 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 June 6, 2005). 10.20 Series C Unsecured Convertible Debenture and Warrants Purchase Agreement, dated October 18, 2005 by and between Airtrax, Inc. and the investor named on the signature page thereto (Filed as an exhibit to the Company's Form 8-K filed on October 24, 2005). 10.21 Registration Rights Agreement dated October 18, 2005, by and between Airtrax, Inc. and the investor named on the signature page thereto (Filed as an exhibit to the Company's Form 8-K filed on October 24, 2005). 10.22 Series C Unsecured Convertible Debenture of Airtrax, Inc. (Filed as an exhibit to the Company's Form 8-K filed on October 24, 2005). 10.23 Form of Stock Purchase Warrant of Airtrax, Inc. (Filed as an exhibit to the Company's Form 8-K filed on October 24, 2005). 10.24 Amended and Restated Stock Acquisition Agreement effective as of February 19, 2004 by and between Airtrax, Inc. and Fil Filipov (incorporated by reference to our registration statement on Form SB-2 filed on November 3, 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). 21 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 14th day of November 2005. AIRTRAX, INC. By:/s/ Peter Amico - -------------------------------------------------------- Peter Amico, Chief Executive Officer, Acting Chief Financial Officer (Principal Executive and Financial Officer) and Chairman of the Board of Directors EX-31 2 sep30200510qsbex311.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 September 30, 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. November 14, 2005 /s/ Peter Amico - ---------------------------- Peter Amico Chief Executive Officer, Acting Chief Financial Officer (Principal Executive and Financial Officer) EX-32 3 sep30200510qsbex321.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 September 30, 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. November 14, 2005 /s/ Peter Amico - --------------------------- Peter Amico Chief Executive Officer, Acting Chief Financial Officer (Principal Executive and Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----