-----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, IUnXteJoDw+CntRHMlZlfFlQPFNaomKqhEiqhkjZ6VsE+BMNbW+HzfOKEhVczu8E uo2cpVtppSeS0dJ7Rgg8Ag== /in/edgar/work/20000816/0001101240-00-000040/0001101240-00-000040.txt : 20000922 0001101240-00-000040.hdr.sgml : 20000922 ACCESSION NUMBER: 0001101240-00-000040 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRTRAX INC CENTRAL INDEX KEY: 0001081372 STANDARD INDUSTRIAL CLASSIFICATION: [6770 ] IRS NUMBER: 223506376 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-25791 FILM NUMBER: 703673 BUSINESS ADDRESS: STREET 1: 1616 PENNSYLVANIA AVE 122 CITY: VINELAND STATE: NJ ZIP: 08361 BUSINESS PHONE: 8563278112 MAIL ADDRESS: STREET 1: 1616 PENNSYLVANIA AVE 122 CITY: VINELAND STATE: NJ ZIP: 08361 FORMER COMPANY: FORMER CONFORMED NAME: MAS ACQUISITION IX CORP DATE OF NAME CHANGE: 19990308 10QSB 1 0001.txt U.S. 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 period ended June 30, 2000. [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE Act of 1934 for the transition period from ___ to ___. Commission file number: 0-25791 AIRTRAX, INC. --------------- (Name of Small Business Issuer in its charter) New Jersey 22-3506376 ------------ ------------- (State of Incorporation) (I.R.S. Employer I.D. Number) 870B Central Avenue, Hammonton, New Jersey 08037 ------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number 609-567-7800. -------------- 1616 Pennsylvania Avenue, #122, Vineland, New Jersey 08361; 856-327-8112 - ------------------------------------------------------------------------- (Former address and former telephone number, if changed from last report) Securities registered under Section 12 (b) of the Act: Title of each class Name of exchange on which to be registered each class is to be registered None None Securities registered under Section 12(g) of the Act: Common Stock (Title of Class) Check whether issuer (1) filed all reports 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. (1). Yes: X No: (2). Yes: X No: The number of shares issued and outstanding of issuer's common stock, no par value, as of June 30, 2000 was 4,687,307. Transitional Small Business Issuer Format (Check One): Yes: No: X TABLE OF CONTENTS INDEX PAGE PART I - FINANCIAL STATEMENTS Item 1. Financial Statements. Balance Sheets.......................................................3 Statements of Income.................................................4 Statements of Changes in Stockholder's Equity........................5 Statements of Cash Flows.............................................6 Notes to Financial Statements........................................7 Item 2. Management's Discussion and Analysis.........................11 PART II - OTHER INFORMATION Item 1. Legal Proceedings............................................12 Item 2. Changes in Securities........................................12 Item 3. Defaults upon Senior Securities..............................12 Item 4. Submission of Matters to Vote of Securityholders.............12 Item 5. Other Information............................................13 Item 6. Exhibits and Reports on Form 8-K.............................14 Signatures...........................................................14 AIRTRAX, INC. Financial Statements June 30, 2000 PAGE 2 AIRTRAX, INC. BALANCE SHEETS June 30, December 31, 2000 1999 --------------- ----------------- ASSETS - ------------- Current Assets Cash $ 23,676 $ 48,652 Accounts receivable 1,560 71,453 Inventory 787,709 511,525 Prepaid expenses 6,938 6,938 -------------- ------------- Total current assets 819,883 638,568 Fixed Assets Office furniture and equipment 34,003 34,003 Automotive equipment 16,915 16,915 Shop equipment 20,909 20,660 Casts and tooling 74,162 72,962 -------------- -------------- 145,989 144,540 Less, accumulated depreciation 70,585 55,777 -------------- -------------- Net fixed assets 75,404 88,763 Other Assets Patents - net 69,050 50,380 Utility deposits 65 65 -------------- ------------- Total other assets 69,115 50,445 -------------- ------------- TOTAL ASSETS $ 964,402 $ 777,776 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY ---------------------------------------------- Current Liabilities Accounts payable $ 749,437 $ 527,255 Accrued liabilities 54,258 15,161 Stockholder note payable 98,810 50,000 ------------- ------------- Total current liabilities 902,505 592,416 Stockholders' Equity Common stock - authorized, 5,000,000 shares without par value; issued and outstanding - 4,687,307 and 4,549,013, respectively 46,873 45,490 Preferred stock - authorized, 500,000 shares without par value; 275,000 issued and outstanding 12,950 12,950 Additional paid-in-capital 1,989,374 1,784,038 Retained deficit (1,987,300) (1,657,118) ------------- ------------- Total stockholders' equity 61,897 185,360 ------------- ----------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 964,402 $ 777,776 ============= ============= The accompanying notes are an integral part of these financial statements. -3- AIRTRAX, INC. STATEMENTS OF INCOME For the Three and Six Month Periods Ended June 30, 2000 and 1999 YEAR 2000 YEAR 1999 ---------------------- ------------------- Six Three Six Three Months Months Months Months ---------- ----------- --------- -------- SALES $ 32,389 $ 4,800 $ 8,892 $ 8,892 COST OF GOODS SOLD 9,694 3,795 4,487 4,487 ---------- ----------- ---------- -------- Gross Profit 22,695 1,005 4,405 4,405 OPERATING AND ADMINISTRATIVE EXPENSES: Cost of prototype development 121,454 42,081 80,704 61,752 Auto expense 44 - 74 74 Health insurance 4,978 2,517 4,910 2,455 Utilities 808 286 966 440 Telephone 4,989 2,032 4,630 2,314 Shipping, postage and office supplies 13,315 5,737 1,496 1,325 Rent - - 6,980 3,256 Professional fees 39,296 14,276 32,547 25,093 Travel and entertainment 5,697 3,939 5,467 1,624 Advertising and promotion 16,175 4,361 44,976 31,885 Interest expense 4,003 3,938 3,983 1,823 Operating supplies 9,715 8,126 - - Depreciation and amortization 17,024 8,512 15,595 7,910 Insurance 821 - 2,872 255 Equipment rental 2,856 1,713 2,857 1,714 Payroll and related taxes 111,704 61,371 103,296 67,580 ------------ --------- ---------- -------- Total General and Administrative Expenses 352,879 158,889 311,353 209,500 ------------ --------- ---------- -------- NET LOSS BEFORE OTHER INCOME (330,184) (157,884) (306,948) (205,095) Other income 2 1 1,333 1,333 ------------- ----------- --------- -------- NET LOSS $ (330,182) $(157,883) $(305,615) $(203,762) ============= ============ ========== ========= NET LOSS PER SHARE $(.08) $(.04) $(.08) $(.05) ============= ============ =========== ========= The accompanying notes are an integral part of these financial statements. -4- AIRTRAX, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Six Month Period Ended June 30, 2000 COMMON PREFERRED STOCK STOCK ADDITIONAL ------------------ ---------------- PAID-IN RETAINED Shares Amount Shares Amount CAPITAL DEFICIT TOTAL -------- --------- ------- -------- --------- ----------- --------- Balance, December 31, 1999 4,549,013 $ 45,490 275,000 $12,950 $1,784,038 $(1,657,118) $185,360 Private placement sales of stock 41,034 410 128,102 128,512 Shares issued Under option exercises 80,494 805 44,773 45,578 Shares issued for services 16,766 168 32,461 32,629 Net loss for the period (330,182) (330,182) ----------- -------- ------- -------- ---------- ---------- --------- Balance, June 30, 2000 4,687,307 $ 46,873 275,000 $12,950 $1,989,374 $(1,987,300)$ 61,897 =========== ======== ======= ======= =========== ============ ======= The accompanying notes are an integral part of these financial statements. -5- AIRTRAX, INC. STATEMENTS OF CASH FLOWS For the Three and Six Month Periods Ended June 30, 2000 and 1999 Year 2000 Year 1999 -------------------- ------------------- Six Three Six Three Months Months Months Months ------ ------ ------ ------ CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $(330,182) $(157,883) $(305,615) $(203,762) Adjustments to reconcile net income to net cash consumed by operating activities: Depreciation and amortization 17,024 8,512 15,595 7,910 Value of common stock issued for services 41,956 35,748 12,470 12,470 Changes in current assets and liabilities: Increase (decrease) in accounts payable and accrued liabilities 261,279 129,090 (75,500) (61,246) Increase in prepaid expense - - (4,438) (6,938) Decrease (increase) in accounts receivable 69,893 43,412 228 (2,372) Increase in inventory (276,184) (136,146) (21,513) (5,519) ---------- ---------- --------- -------- Net Cash Consumed By Operating Activities (216,214) (77,267) (378,773)(259,457) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of equipment (1,449) (1,200) (44,858) (33,545) Additions to patent cost (20,886) (20,886) - - Net Cash Consumed By Investing Activities (22,335) (22,086) (44,858) (33,545) CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds of common stock sales 164,763 11,684 874,806 714,604 Proceeds of borrowing 48,810 46,820 21,043 21,043 Preferred stock dividends - - (34,375) (17,187) ---------- ---------- --------- -------- Net Cash Provided By Financing Activities 213,573 58,504 861,474 718,460 Net Increase (Decrease) In Cash (24,976) (40,849) 437,843 425,458 Balance at beginning of period 48,652 64,525 5,081 17,466 ----------- ---------- --------- -------- Balance at end of period $ 23,676 $ 23,676 $442,924 $442,924 =========== ========== ========= ========= The accompanying notes are an integral part of these financial statements. -6- AIRTRAX, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Of Company The Company was formed April 17, 1997. On May 19, 1997, it merged with a predecessor which had initiated and advanced the development of its omni-directional technology. On November 5, 1999, the Company merged with MAS Acquisition IX Corp. ("MAS"), a reporting company under federal securities law. Pursuant to this merger agreement, the Company assumed the reporting status of MAS. In both merger transactions, the Company was the surviving entity. Business The Company has designed a forklift vehicle using omni-directional technology obtained under a contract with the United States Navy Surface Warfare Center in Panama City, Florida. The right to exploit this technology grew out of a Cooperative Research and Development Agreement with the Navy. Significant resources have been devoted during the past two years to the construction of a prototype of this omni-directional forklift vehicle. It is expected to be in full commercial production during the fourth quarter of 2000. At that time, it will be offered to industrial users. The Company has also developed a traditional helicopter ground handling machine which has been marketed by the Company on a limited basis. Cash For purposes of the statements of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. Inventory Inventory consists principally of component parts and supplies which are being used to assemble forklift vehicles. Inventories are stated at the lower of cost (determined on a first in-first- out basis) or market. Fixed Assets Fixed assets are recorded at cost. Depreciation is computed by use of the Modified Accelerated Cost Recovery System (MACRS), as permitted by Internal Revenue Service Regulations, using lives of seven years for furniture and shop equipment and five years for computers and automobiles. Intangible Assets Patents The Company incurred costs to acquire and protect certain patent rights. These costs were capitalized and are being amortized over a period of fifteen (15) years on a straight- line basis. Prototype Equipment The cost of developing and constructing the prototype omni- directional helicopter handling vehicle and the omni- directional forklift vehicle is expensed as incurred. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated. -7- AIRTRAX, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2000 2. RELATED PARTY TRANSACTIONS During 1999, 305,737 shares of common stock of the Company were issued in lieu of dividends on the preferred stock, as permitted by the terms of the preferred stock issue. All of the preferred stock is owned by the majority shareholder (see Note 4 for description of the preferred stock). This majority shareholder is a corporation wholly owned by the president of the Company. The majority shareholder corporation advanced a total of $98,810 to the Company during 1999 and 2000. This debt is due on demand and bears interest as 12%. Since June 1999, the Company has made its headquarters in premises owned by the Company's president, which to date has been rent free. 3. PRIVATE PLACEMENTS The Company conducted private placements of its common stock during 1999 and the first half of the year 2000. These placements were exempt under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. A total of 614,552 shares of common stock were sold under the offerings during 1999, and 41,034 shares during the first half of 2000, resulting in net proceeds of $872,268 and $128,512, respectively. In addition, during the first half of 2000, 75,494 shares of common stock were issued under option arrangements with officers and directors, yielding proceeds of $43,078; and 21,766 shares of common stock were issued in lieu of cash for services valued at $35,129, of which 5,000 shares were issued for services under an option arrangement with a director. 4. PREFERRED STOCK The Company is authorized to issue 500,000 shares of preferred stock, without par value. At June 30, 2000, 275,000 of these shares had been issued. Each of these shares entitles the holder to a 5% cumulative dividend based on a $5 per share stated value. If sufficient cash is not available, or at the option of the shareholder, these dividends may be paid in common stock. If payment is in stock, it is to be valued at a price calculated at thirty percent of the last price offered or traded during the applicable quarter. This issue of preferred stock also provides a voting right of 10 votes for each share. Dividends totaling $105,119 had accrued through December 31, 1998 on this issue of preferred stock; another $68,750 accrued during 1999 and $34,375 accrued during the first half of the year 2000. Cash dividends of $13,005 were paid during 1998 and $40,498 was paid during 1999. An additional $91,721 was paid during 1999 through the issuance of common stock, leaving a balance of $63,021 unpaid at June 30, 2000. The characteristics of the remaining 225,000 preferred shares authorized have not been specified. -8- AIRTRAX, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2000 5. EARNINGS PER SHARE Six Months Ended June 30, 2000 ---------------------------------------------- Income Average Shares Per Share (Loss) Outstanding Amount ----------- ------------------ ----------- Net loss $ (330,182) Adjustment for preferred stock dividends (34,375) ----------- Income (loss) allocable to common shareholders $ (364,557) 4,618,160 $ (.08) =========== =========== ======= Three Months Ended June 30, 2000 --------------------------------------------- Net Loss $ (157,883) Adjustment for preferred stock dividends (17,187) ----------- Income (loss) allocable to common shareholders $ (175,070) 4,673,771 $ (.04) =========== ============ ====== Six Months Ended June 30, 1999 ---------------------------------------------- Net loss $ (305,615) Adjustment for preferred stock dividends (34,375) ----------- Income (loss) allocable to common shareholders $ (339,990) 4,056,676 $ (.08) =========== ============ ======= Three Months Ended June 30, 1999 --------------------------------------------- Net Loss $ (203,762) Adjustment for preferred stock dividends (17,188) ----------- Income (loss) allocable to common shareholders $ (220,950) 4,115,358 $ (.05) =========== ============ ======= 6. INCOME TAXES The Company has experienced losses each year since its inception. As a result, it has incurred no Federal income tax. The Internal Revenue Code allows net operating losses (NOL's) to be carried forward and applied against future profits for a period of twenty years. A New Jersey corporation business tax liability of $200 accrued during each of the years 1999 and 1998, that being the minimum annual tax imposed on all New Jersey corporations. New Jersey tax law allows the carry forward of NOL's for seven years. The Company had NOL carry forwards of $1,009,000 as of December 31, 1999. The potential tax benefit of these NOL's has not been recorded on the books of the Company. -9- AIRTRAX, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2000 7. RENTALS UNDER OPERATING LEASES Office equipment is leased under an operating lease that expires in June 2003. The following is a schedule of future minimum rental payments required under the operating lease: Year Ending December 31, Amount ------------ ------- 2000 (Remainder) $ 3,810 2001 6,857 2002 6,857 2003 2,857 --------- $ 20,381 ========= Rent expense amounted to $1,713 and $2,856, respectively in the three and six month periods ended June 30, 2000 and $4,970 and $9,837 in 1999 periods. 8. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION Cash paid for interest during the second quarter of 2000 totaled $1,142. There was no cash paid for income taxes. There were no noncash investing activities during either the 2000 period or 1999 period. The following noncash financing activities occurred: a. Shares of common stock totaling 19,669 shares were issued for services during the three months ended June 30, 2000. These were valued at $28,921. 9. CONTINGENCIES Pursuant to agreements relating to the merger transaction with MAS, the Company was required to issue 114,867 shares of common stock to former shareholders of MAS (MAS Common Stock) and make a cash payment to an affiliate of the majority shareholder of MAS in the amount of $25,000. The Company has asserted claims against the majority shareholder. The claims involve the amount of the MAS Common Stock and the cash due to the majority shareholder and affiliate under the merger agreement. The Company has not issued the MAS Common Stock nor paid the $25,000. The parties are currently discussing the matter; however, no assurances can be given that a resolution will be effected by the parties. The Company has an employment agreement with its president which provides, in part, for options permitting the president to acquire up to 50,000 shares of common stock per year. The first 10,000 shares each year are available at a price per share of $1; the next 25,000 shares are available at a price per share equal to 30% of the lowest price paid for the stock during the 30 days preceding the date of exercise; the last 15,000 shares are available at a price equal to one half the 30% price described above. These options accumulate if they are not exercised. None of these options had been exercised prior to December 31, 1999. Options for 60,000 shares were exercised during the first quarter of 2000, 50,000 at the 30% price and 10,000 at the $1 price. Options for 22,500 shares were outstanding at June 30, 2000 at the one half of 30% price. The employment agreement terminated June 30, 2000. -10- Item 2. Management's Discussion and Analysis. The following discusses the financial results and position of the consolidated accounts of the Company for the periods indicated. Results of Operations Six Months Ended June 30, 2000 compared with Six Months Ended June 30, 1999. For the six-month period ended June 30, 2000 and comparable period in 1999, the Company was a development stage company. Revenues for the three- and six-months ended June 30, 2000 were $4,800 and $32,389, respectively, compared with $8,892 and $8,892 for the same respective periods in 1999. Revenues for the six-month period in 2000 consisted of $13,645 of sales of a non omni-directional product and $18,744 in contract revenues from the United States Navy. Cost of sales for the six-month period in 2000 period was $9,694 representing parts and manufacturing costs for the non-omni directional product. General and administrative expenses which includes administrative salaries and overhead for the three and six-month periods in 2000 totaled $158,889 and $352,879, respectively, compared with $209,500 and $311,353 for the same respective periods in 1999. The increase of $41,526 for the six-month period in 2000 is due to increased prototype development costs of the omni-directional wheel, increased professional fees associated with Company's reporting status under the federal securities laws, increased salary payments to the president of the Company and initiation of salary payments to the executive vice president of the Company, partially offset by a reduction in advertising and promotional costs. Net loss for the three- and six-month periods in 2000 was $157,883 and $330,182, respectively, compared with a net loss of $203,762 and $305,615 for the respective prior periods. Liquidity and Capital Resources Since its inception, the Company has financed its operations through the private placement of its common stock. During 1999, the Company raised approximately $872,268 net of offering costs from the private placement of its common stock. During the first half of 2000, the Company raised approximately $128,512 net of offering costs from the private placement of its common stock. As of June 30, 2000, the Company's working capital was ($82,672). In addition, the Company anticipates that its use of cash will be substantial for the foreseeable future. In particular, management of the Company expects substantial expenditures for inventory and product production in anticipation of the rollout of its omni- directional forklift expected to occur in the fourth quarter of fiscal 2000. The Company intends to fund its operations through the issuance of equity and/or debt securities. Presently, the Company is seeking capital from one or more funding sources, however, at this time no arrangement has been finalized. No assurances can be given that the Company will be successful in obtaining sufficient capital to fund the initiation of its production activities, as well as its ongoing operations. If the Company is unable to obtain sufficient funds in the near future, such event will have a material adverse impact on the Company and its business prospects. -11- Fixed assets, net of accumulated depreciation, totaled $75,404 on June 30, 2000. Fixed assets, net of accumulated depreciation, totaled $88,763 on December 31, 1999. Forward Looking Statements. Certain of the statements contained in this Quarterly Report on Form 10-QSB includes "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). See the Company's Annual Report on Form 10-KSB for the period ending December 31, 1999 for additional statements concerning operations and future capital requirements. Certain risks exist with respect to the Company and its business, which risks include the need for additional capital, additional product testing to be completed, and lack of commercial product. Readers are urged to refer to the section entitled "Cautionary Statements in the Company's Form 10-KSB for the period ended December 31, 1999 for a broader discussion of such risks and uncertainties. Part II OTHER INFORMATION Item 1. Legal Proceedings. Pursuant to agreements relating to the merger transaction with MAS Acquisition IX Corp. ("MAS"), the Company was required to issue 114,867 shares of common stock to former shareholders of MAS ("MAS Common Stock") and make a cash payment to an affiliate of the majority shareholder of MAS in the amount of $25,000. The Company has asserted claims against the affiliate and majority shareholder. The claims involve the amount of the MAS Common Stock and the cash due to the majority shareholder and affiliate under the merger agreement. The Company has not issued the MAS Common Stock nor has it paid the $25,000. The parties are currently discussing the matter, however, no assurances can be given that a resolution of this dispute will be effected by the parties. Item 2. Changes in Securities. None Item 3. Defaults upon Senior Securities. None Item 4. Submission of Matters to a Vote of Securityholders. None -12- Item 5. Other Information. The following is a press release issued by the Company on July 28, 2000. FOR IMMEDIATE RELEASE HAMMONTON, NEW JERSEY 28 July 2000. US NAVY SELECTS AIRTRAX TO DEVELOP ADVANCED SHIPBOARD MATERIAL HANDLING SYSTEM OMNI DIRECTIONAL MATERIAL HANDLING VEHICLES AIRTRAX, Inc. OTC BB (AITX) reports that it has been awarded a Phase II Contract by the US Navy under the Department of Defense's Small Business Innovation Research (DOD SBIR) program to develop an advanced omni directional material handling vehicle. The contract, with options, has a potential value of nearly $1 Million. Under the Phase II contract, AIRTRAX will develop a prototype omni-directional multi-purpose mobility platform (MP2) vehicle during a 24- month performance period. The MP2 will be designed to handle munitions and jet engines onboard aircraft carriers. The contract follows a Phase I (DOD SBIR) contract and Option which were awarded to AIRTRAX in 1999. The MP2 development is a key facet of the Navy's strategy to increase the number of aircraft carrier missions conducted in a 24 hour period. The Navy must increase the speed at which material is transported from within the ship's magazines to the flight deck. The long and ungainly weapons must be maneuvered through areas that are congested with personnel, material, and aircraft. AIRTRAX's omni directional vehicle technology will enable the AIRTRAX vehicle to negotiate the route from magazine to flight deck much faster with fewer personnel. In announcing the contract, AIRTRAX Executive Vice President Barney Harris said, "The Navy will realize an immediate benefit from this technology's insertion. Navy ships are literally designed around the ability to move material within; future Naval ships designed around systems incorporating omni directional vehicle technology will require less internal space dedicated to material handling, and as a result will be more cost effective ." Harris added "The DOD SBIR procurement mechanism enables the Navy to purchase additional development services and production hardware under a Phase III contract, if desired." In addition, the Company believes omni directional vehicle technology will speed material handling on other classes of Naval combatant and auxiliary vessels. For instance, Naval re-supply ships, have a similar situation in that a massive amount of material must be transferred from stowage spaces within the ship to transfer stations on deck. Loads are transferred from re-supply to combat ships while steering parallel courses via a tensioned wire trolley system. While ships are connected with the wire trolley and transferring cargo, the combat ship cannot perform its functions, since it cannot maneuver. The Company believes that omni directional mobility will enable a reduction of time required to replenish ships at sea. Both re-supply and combat ships suffer from congested passageways, a wide variety of load sizes and shapes, and the high tempo. The Company believes these situations are a natural environment for omni material handling technology including fork lifts and specialty transporters. AIRTRAX is completing development of a commercial omni directional forklift. Pilot models of the ATX-Series are undergoing final testing. Production models will be shipped to dealers later this year. "The ATX-Series will sell at prices competitive with any forklift on the market." according to Peter Amico, Company President. The Company is also developing a line of products incorporating omni- directional vehicle technology for use in material handling, construction, health care, and entertainment. A Free Video showing the ATX-Series forklift can be seen on the Company website at www.airtrax.com. For more information, contact Peter Amico at PO 1237, Hammonton, NJ 08037-1237 - Phone 877- AIRTRAX, 609-567-7895 Fax. -13- This document contains forward-looking statements that are subject to risks and uncertainties. For such statements Airtrax claims the protection of the safe harbor for forward- looking statements contained in the Private Securities Litigation Reform Act. The Company intends that such statements about the Company's future expectations including future revenues and earnings and all other forward-looking statements be subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. Readers should refer to the Company reports filed with the Securities and Exchange Commission, which includes its Form 10-KSB for the period ended December 31, 1999, for a discussion of risks and uncertainties regarding the Company and its business. Item 6. Exhibits. (a). Furnish the Exhibits required by Item 601 of Regulation S-B. Exhibit 27.1 - Financial Data Schedule (b) Reports on Form 8-K. None. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AIRTRAX, INC. Date: August 14, 2000 /s/Peter Amico Peter Amico President and Principal Financial Officer -14- EXHIBIT 27.1 FINANCIAL DATA SCHEDULE ART.5 FDS FOR 2nd QUARTER 10-Q Multiplier 1,000 PERIOD TYPE 6 MONTHS FISCAL YEAR END DEC-31-1999 PERIOD END JUNE-30-2000 CASH 24 SECURITIES 0 RECEIVABLES 2 ALLOWANCES 0 INVENTORY 788 CURRENT-ASSETS 819 PP&E 75 DEPRECIATION 71 TOTAL ASSETS 964 CURRENT-LIABILITIES 903 BONDS 0 COMMON 47 PREFERRED-MANDATORY 13 PREFERRED 13 OTHER-SE 2 TOTAL-LIABILITIES-AND-EQUITY 964 SALES 30 TOTAL-REVENUES 30 CGS 10 TOTAL-COST 363 OTHER-EXPENSES (2) LOSS-PROVISION 0 INTEREST-EXPENSE 0 INCOME-PRETAX (330) INCOME-TAX 0 INCOME-CONTINUING (330) DISCONTINUED 0 EXTRAORDINARY 0 CHANGES 0 NET-INCOME (330) EPS-PRIMARY (.08) EPS-DILUTED (.08) -15- -----END PRIVACY-ENHANCED MESSAGE-----