10QSB/A 1 txen10qa2.txt U. S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB/A Amendment No.2 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934 For the quarterly period ended September 30, 2000 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 Commission File No. 000-29209 21st CENTURY TECHNOLOGIES, INC. ------------------------------------------ (Exact name of registrant as specified in its Charter) NEVADA 48-1110566 --------------------------- -------------------------------- (State or Other Jurisdiction of (I.R.S. Employer ID. No.) incorporation or organization) 2513 East Loop 820 North Ft. Worth, TX 76118 ----------------------------------------------------- (Address of Principal Executive Offices) Issuer's Telephone Number, including area code: (817) 284-0099 Facsimile Number: (817) 284-7528 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations. PART II - OTHER INFORMATION Item 1. Legal Proceedings Item 6. Exhibits and Reports on Form 8-K Part I. FINANCIAL INFORMATION This report includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements other than statements of historical fact included in this report are forward looking statements. Such forward looking statements include, without limitation, statements as to estimates, expectations, beliefs, plans, and objectives concerning the Company's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources" regarding the Company's estimate of sufficiency of existing capital resources and its ability to raise additional capital to fund cash requirements for future operations and acquisitions. The forward looking statements are subject to assumptions and beliefs based on current information known to the Company and factors that are subject to uncertainties, risk and other influences, which are outside the Company's control, and could yield results differing materially from those anticipated. The ability to achieve the Company's expectations is contingent upon a number of factors which include (i) availability of sufficient capital and capital market conditions, (ii) the Company's ability to produce and market its products as produced by its various subsidiaries (including, but not limited to, the PT Night Sights, Sea Patch, Gripper, Griffon 1911 Colt 45 replica sidearm, and tire sealant), (iii) effect of any current or future competitive products, (iv) on going cost of research and development activities, and (v) the retention of key personnel. "PT Night Sights", "Sea Patch", "Gripper" and "Griffon" are our trademarks. This report may contain trademarks and service marks of other companies. ITEM 1. FINANCIAL STATEMENTS 21st Century Technologies, Inc. and Subsidiaries Consolidated Balance Sheet (Unaudited) Restated Sept 30, 2000 Sept 30, 1999 -------------- -------------- Assets Current Assets: Cash and cash equivalents $ 280,601 $ 15,478 Accounts Receivable, Net 457,390 1,000,859 Inventories 610,099 159,416 Notes Receivable 692,580 55,873 -------------- -------------- Total Current Assets 2,040,670 1,231,626 Property, Plant, and Equipment, Net 461,081 201,415 Other Assets, Net 535,410 485,511 -------------- -------------- Total Assets $ 3,037,161 $ 1,918,552 ============== ============== Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable-trade $ 59,844 $ 123,056 Accounts Payable-other 90,356 52,685 Deferred Income 225,000 0 -------------- -------------- Total Current Liabilities 375,200 175,741 Other Liabilities: Working Capital Advances 1,765,458 0 Customer Deposits 0 5,526 Notes Payable 141,678 67,245 -------------- -------------- Total Other Liabilities 1,907,136 72,771 -------------- -------------- Total Liabilities: 2,282,336 248,731 Stockholders' Equity: Common Stock, issued 52,857,240 and outstanding shares at $.001 par value at September 30, 2000 52,857 40,450 Paid-in Capital 4,730,298 3,895,467 Common Stock Earned, but not Issued 360,000 360,000 Retained Earnings (Deficit) (4,351,602) (2,585,788) Treasury Stock (33,728) (30,089) Stock Subscriptions (3,000) (10,000) -------------- -------------- Total Stockholders' Equity 754,825 1,670,040 -------------- -------------- Total Liabilities and Stockholders' Equity $ 3,037,161 $ 1,918,552 ============== ============== See Notes to Consolidated Financial Statements 21st Century Technologies, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) Restated Restated 3 Mos. Ended 3 Mos. Ended 9 mos. ended 9 mos. ended Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999 -------------- -------------- -------------- ------------- Net Sales Innovative Weaponry $ 163,080 $ 191,648 $ 611,425 $ 685,179 -------------- -------------- -------------- ------------- Total Net Sales 163,080 191,648 611,425 685,179 Cost of Sales 150,996 172,121 562,606 489,919 -------------- -------------- -------------- ------------- Gross Profit 12,084 19,527 48,819 195,259 General and administrative expenses 266,762 151,319 1,235,896 485,486 Depreciation and Amortization 28,626 30,901 99,812 92,703 -------------- -------------- -------------- ------------- Net Income (Loss) (283,304) (162,693) (1,286,889) (382,930) Estimated Income Taxes 0 0 0 0 -------------- -------------- -------------- ------------- Net Income (Loss) $ (283,304) $ (162,693) $ (1,286,889) $ (382,930) ============== ============== ============== ============= Earnings (Loss) Per Common Share: Basic & Diluted $ (0.00) $ (0.00) $ (0.02) $ (0.01) See Notes to Consolidated Financial Statements 21st Century Technologies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended Sept 30, 2000 Restated 2000 1999 ------------- ------------- Cash Flows From Operating Activities: Net Income (Loss) $ (1,286,889) $ ( 382,930) Adjustments to reconcile net income to net cash provided (used) by operating activities Depreciation and Amortization 99,812 92,703 Change in operating assets and liabilities: Accounts receivable ( 375,504) 4,196 Sale of Receivable 150,000 - Deferred Revenue 225,000 - Inventory (260,974) (440) Other non-current assets and liabilities, net (75,205) 5,817 Accounts payable (118,249) (136,465) ------------- ------------- Net Cash Provided (Used) by Operating Activities (1,642,009) (417,119) Cash Flows From Investing Activities: Purchase Equipment (333,642) 14,101 ------------- ------------- Net Cash Provided (Used) by Investing Activities (333,642) 14,101 Cash Flows From Financing Activities: Working Capital Advances 1,765,458 - Increase/(Decrease) in long-term debt 68,268 (74,663) Sale of stock and subscriptions received 310,712 482,038 ------------- ------------- Net Cash Provided (Used) by Financing Activities 2,144,438 407,375 ------------- ------------- Net Increase(Decrease) in Cash & Cash Equivalents 168,787 4,357 Cash and Cash Equivalents at Beginning of Period 111,814 11,121 ------------- ------------- Cash and Cash Equivalents at End of Period $ 280,601 $ 15,478 ============= ============= See Notes to Consolidated Financial Statements 21st Century Technologies, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity For the Nine Months Ended Sept 30, 2000 (Unaudited) Restated
Common Paid-in Retained Treasury Stock Stock Stock Capital (Deficit) Stock Subscribed Earned Total --------- ------------ ------------ --------- ---------- ----------- ------------ Balance December 31, 1999 $ 50,083 $ 4,420,260 $(3,064,715) $(31,628) $(79,700) $ 360,000 $ 1,654,300 Sale of Stock 2,774 310,038 - (2,100) - - 310,712 Subscriptions Received - - - - 76,700 - 76,700 Net Income (Loss) - - (1,286,889) - - - (1,286,889) --------- ------------ ------------ --------- --------- ------------ ------------ Balance Sept 30, 2000 $ 52,857 $ 4,730,298 $(4,351,602) $(33,728) $ (3,000) $ 360,000 $ 754,825 ========= ============ ============ ========= ========= ============ ============
See Notes to Consolidated Financial Statements 21st Century Technologies, Inc. and Consolidated Subsidiaries Notes to Consolidated Financial Statements For the Three Months Ended September 30, 2000 and 1999 (Unaudited) Note 1: Summary of Significant Accounting Policies: a. Organization and Business Activities 21st Century Technologies, Inc. was incorporated under the laws of the State of Delaware on May 15, 1967 as Satcom Corporation. On November 6, 1991, the Company changed its name to Hughes Pharmaceutical Corporation. Subsequent to 1991, the Company changed its name from Hughes Pharmaceutical Corporation to First National Holding Corporation(FNHC) Delaware. The Company became public in 1985 through a merger with International Fluidics Control, Inc. (formerly Sensory Systems, Inc., Training With The Pros, Inc., and/or M-H Studios, Inc.). International Fluidics Control, Inc. successfully completed a public offering of its securities in 1969 under Regulation A of the Securities Act of 1933. As of December 31, 1985, the Company had liquidated all business operations and began the search for a suitable merger or acquisition candidate. As a result of this action, the Board of Directors approved a quasi-reorganization for accounting purposes, effective January 1, 1986, whereby all accumulated deficits in shareholders' equity were offset against additional paid-in capital and common stock balance sheet accounts to the extent of reducing these accounts to equal the par value of the issued and outstanding shares of common stock. During the third quarter of 1994, in conjunction with the execution of a letter of intent to acquire Innovative Weaponry, Inc. (a New Mexico corporation), the Company consummated a plan of merger between FNHC Nevada and FNHC Deleware whereby the Nevada Corporation was the survivor (see below) and changed its corporate name to Innovative Weaponry, Inc. to better reflect its future actions and pending relationship with the acquisition target. On September 15, 1997, the Board of Directors approved a name change to 21st Century Technologies, Inc. Innovative Weaponry, Inc. - New Mexico was incorporated on June 22, 1988 under the laws of the State of New Mexico. The Company was formed for the development and sale of specialized firearms, firearm systems and related equipment. On September 14, 1992, Innovative Weaponry, Inc. filed a petition for relief under Chapter 11 of the Federal Bankruptcy Laws in the United States Bankruptcy Court of the District of New Mexico. Under Chapter 11, certain claims are stayed while the Debtor continues business operations as Debtor-in-Possession. On August 19, 1994, IWI-NV (now 21st Century Technologies, Inc.) and IWI-NM entered into a letter of intent whereby IWI-NV would use its unregistered, restricted common stock and cash to satisfy certain obligations of IWI-NM in settlement of IWI-NM's bankruptcy action. On February 1, 1995, the U. S. Bankruptcy Court of the District of New Mexico confirmed the IWI-NM's plan of reorganization. The plan became effective 30 days after its confirmation. IWI-NM became a wholly owned subsidiary of Innovative Weaponry, Inc. (IWI-NV) (formerly First National Holding Corporation) (FNHC Nevada) (now known as 21st Century Technologies, Inc.), a publicly owned company. b. Cash and Cash Equivalents: For purposes of reporting cash flows, the Company considers all cash on hand and in banks, certificates of deposit and other highly liquid debt instruments with a maturity of three months or less at the date of purchase to be cash and cash equivalents. c. Revenue recognition and credit policies: In the normal course of business, the Company sells its goods on "cash in advance" or "cash on delivery", but primarily extends unsecured credit to its customers involved in the retail and wholesale sale of the Company's products. Revenue is recognized when products are shipped to the wholesale or retail purchaser. All products are shipped F.O.B. the Company's facilities. Management has provided an allowance for doubtful accounts, which reflects its opinion of amounts, which will eventually become uncollectible. In the event of complete non-performance by the Company's customers, the maximum exposure to the Company is the outstanding trade accounts receivable balance at the date of non-performance. d. Inventory: Inventory consists of raw materials used in the manufacture of firearm products and finished goods imported for resale. Inventory is carried at the lower of cost or market value, using the first-in, first-out method (FIFO). e. Property and equipment: Property and equipment is recorded at its historical cost. Depreciation is provided in amounts sufficient to relate the asset cost to operations over the estimated useful life (three to seven years) using the straight-line method for financial reporting purposes. Gains and losses from disposition of property and equipment are recognized as incurred and are included in operations. f. Income Taxes: The Company uses the asset and liability method as identified in SFAS 109, Accounting for Income Taxes. g. Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. h. Asset Impairment: The Company adopted the provisions of SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, in its financial statements for the year ended December 31, 1995. The Company prepares an undiscounted estimate of future cash flows for each long-lived asset (excluding production equipment) on an annual basis. If the carrying value of the asset exceeds undiscounted future cash flows expected to be produced by the asset, the Company recognizes an impairment loss. The Company measures the amount of the impairment loss as the amount by which the carrying value of the asset exceeds its fair value. The Subsidiary Bankruptcy Excess Reorganization Value is evaluated annually for events or conditions which would indicate impairment. Management estimates cash flows which can be expected for continuing to use the asset and then compares these estimated cash flows to the asset's carrying amount. If the estimated cash flows resulting from continuing to use the asset exceed the carrying amount of the asset, an impairment adjustment is not necessary. There has been no effect as of December 31, 1999 of adopting SFAS 121. i. Stock-Based Compensation: The Company will follow the fair value based method of accounting as prescribed by SFAS No. 123, Accounting for Stock-Based Compensation, for its stock-based compensation. The Company currently does not have a stock option plan. j. Principles of Consolidation and Presentation --Wholly-Owned Subsidiaries: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and accounts have been eliminated in the consolidation. k. License Agreement: The License agreement is amortized over the life of the related patent technology (generally 17 years) using the straight-line method. l. Research and Development Costs: The Company expenses any research and development costs in the period which they are incurred. There are no research and development costs incurred in the periods presented. m. Treasury Stock: The Company utilizes the cost method to account for the acquisition of Treasury Stock. n. Basis of Presentation: Financial information presented as of any date other than December 31 has been prepared from the books and records without audit. The accompanying financial statements have been prepared in accordance with the instructions to Form 10QSB and do not include all of the information and the footnotes required by generally accepted accounting principles for complete statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such financial statements, have been included. These financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 1999. Note 2: Accounts Receivable On November 6, 1998, Innovative Weaponry received a purchase order from Continental Weapons Ltd for 32,103 Night Sights. Continental was invoiced and a quantity of sights were shipped to South Africa. The balance of the order ( approximately 1,000 sights) has been manufactured and is being held at the Company's manufacturing facility to be installed on the Griffon replica of the Colt 45 as they are received by the Company. The Company is receiving the first 1000 pistols sightless and are invoiced for a pistol without sights. The receivable is decreased by the number of sights used when they are installed on the pistols and income is credited for the sights installed. Due to Continental's inability to ship the entire 1000 pistol order, the receivable was not decreased materially during 1999. The Continental Weapons invoice remained unpaid as of December 31, 1999; however, the Company negotiated an agreement to sell the receivable for the full invoice value. The sale was consumated April 1, 2000 to Great Mughal Trade Associates, Ltd.(GMTA). GMTA purchased the receivable and the rights to 31,103 Night Sights for $900,000.00 paying $50,000.00 down and a note for $850,000.00 payable $85,000.00 per month for 10 months. $900,000 was removed from Continental's receivable account and was placed in a note receivable-GMTA account as a current asset due with in one year. This is a non-recourse transaction (Griffon has surrendered control and has no obligation to buy the receivable back) and has been accounted for as a secured note rather than the sale of a financial asset under Statement of Financial Accounting Standards No. 125. The night sights which under lie the receivable were valued at the original sales price to Continental for the purpose of the sale of the receivable. The $900,000 sales price represents the balance of the receivable after subtracting the sale of the 1000 night sights installed on the first 1000 pistols. GMTA has the right to repossess the sights and resell them to another purchaser should they be unable to collect from Continental. 9/30/00 6/30/00 3/31/00 12/31/99 12/31/98 Outstanding Invoice- Continental $ 7,432 $23,422 $923,422 $923,422 $930,987 Receivable-GMTA $725,000 $815,000 Note 3: Other Assets License Agreement: In June 1995, Trident, a wholly owned subsidiary of the Company, entered into a license agreement (Agreement) with Trade Partners International, Inc. (TPI) to acquire the exclusive license to certain patent rights conveyed to TPI by The University of California as operators of Los Alamos National Laboratory (patent holder) related to the development, marketing and sales rights to certain specified magnetic and/or magnet technology. The agreed-upon and negotiated value of the Agreement at acquisition date was $75,000. Subsequently, the transaction was re-negotiated and 21st Century acquired all of the common stock of TPI in a Type B reorganization. Trident, as sub-licensee, is obligated to pay a royalty fee of 8.0% on net income (as defined in the Agreement) of products sold using the patented technology. Further, Trident is to pay an annual maintenance fee, which was $24,000 for the third and all subsequent years of the Agreement. All royalty fees paid during a specific year are to be credited to that year's maintenance fee and the maintenance fee requirement is considered met if the royalty payments during an Agreement year are equal to or exceed the required maintenance fee. Trademark: The trademark "PT Night Sights" has been capitalized at cost and is being amortized over 17 years. Bankruptcy excess Re-Organization Cost: Innovative Weaponry, Inc. (IWI) emerged from a bankruptcy filing under Chapter 11 of the US Bankruptcy Code, effective March 1, 1995. As a result of the Plan of Reorganization, IWI became a wholly owned subsidiary of 21st Century Technologies, Inc. and all prior IWI shareholders retained less that a 50% interest in the combined reorganized entities. In conjunction with IWI's emergence from protection under Chapter 11, IWI adopted "fresh-start" accounting as a result of its acquisition by 21st Century. "Fresh start" accounting allows for the restatement of all assets and liabilities being set to the fair market value of each respective category and the restatement of retained earnings to "0". The resulting amount was debited to the account "Reorganization value in excess of amounts allocable to identifiable assets". This balance is being amortized over ten (10) years using the straight-line method. The amortization period began on March 1, 1995, concurrent with the effective date of IWI's Plan of Reorganization. The adjustment necessary to reflect the "fresh-start" accounting, as prescribed by Statement of Position 90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" issued by the American Institute of Certified Public Accountants reflected a Reorganization value in excess of amounts allocable to identifiable assets. Note 4: Stockholders' Equity The total number of all classes of authorized capital stock is 200,000,000 shares, all of which are Common Stock, $0.001 par value per share. As of September 30, 2000, there are 52,857,240 shares of common stock issued. An additional 19,000,000 shares of common stock has been earned under a previous consulting agreement with the Chairman. These shares were not issued to Mr. Wilson because the Company needed the shares to raise equity capital. Additionally, it was discovered that the authorized shares had not been properly filed with the State of Nevada. The Company retroactively corrected this issue during the second quarter. Mr. Wilson's shares are represented in the Equity section of the balance sheet as common stock earned but not issued. An adjustment to the 1997 ending retained earnings was recorded to record the compensation expense incurred by the Company Note 5: Earnings (Loss) Per Common Share Earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the years 1999 and 1998. There were no common stock equivalents outstanding during the years 1999 and 1998. SFAS No. 128, Earnings per Share applies to entities with publicly held common stock and establishes standards for computing and presenting earnings per share (EPS). Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For the Quarter Ended Sept 30, 2000 --------------------------------------- Income Shares Per-Share (Numerator) (Denominator) Amount ------------- -------------- --------- Income ($133,304) Basic EPS Income available to Common Stockholders (133,304) 52,857,240 $(0.00) Effect of Dilutive Securities Common Stock Earned but not Issued 19,000,000 Diluted EPS Income available to common stockholders plus assumed conversions ($133,304) 71,857,240 $(0.00) Note 6: Income Taxes At December 31, 1999, the Company has available net operating loss carryforwards of approximately $2,704,715 for federal income tax purposes that begin to expire in 2008. The federal carryforwards resulted from losses generated in prior years and have created a deferred tax asset o $919,603. It is believed to be "more likely than not" that taxable income in the periods prior to the expiration of the deferred tax assets will not be sufficient for the deferred tax assets to be recognized; therefore, a valuation allowance of $919,603 has been recognized to offset the deferred tax assets. There are no deferred tax liabilities. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Note 7: Risks and Uncertainties The Company operates in highly specialized industries. There are only four companies worldwide who manufacture and sell night sights using tritium. The Company ranks number three out of four. The gun sight industry is highly dependent on major firearms manufacturers as well as consumer and governmental demand for weapons. World conditions and economies can affect the future sales of this product. The Company's magnetic and hydraulic-magnetic technologies have been tested and approved by the American Bureau of Shipping and are being used by Louisianna Emergency Response Training facilities in Holden, LA.; Texas A&M Emergency Services Training Institute in College Station, TX; and Transportation Technology Center Emergency Response Training facility in Pueblo, CO. Demand for these products from governmental and industrial sources is largely estimated and while the Company has studied various markets, no assurance can be given that these products can be successfully marketed. These products have been marketed outside the United States. In future marketing, the Company may be subject to foreign currency fluctuation risks. The Company's firearm replica and tire sealant import division has not been tested in the U. S. market and the estimated demand for these products may not reach the Company's expectations. Note 8: Fair Values of Financial Instruments The following methods and assumptions were used to estimate the fair value of financial instruments: Cash and Cash Equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value. Accounts Receivable and Accounts Payable. The carrying amount of accounts receivable and accounts payable in the balance sheet approximates fair value. Short-Term and Long-Term Debt. The carrying amount of the debts recorded in the balance sheet approximates fair value. The carrying amounts of the Company's financial instruments at December 31, 1999 and 1998 represent fair value. Note 9: Comprehensive Income SFAS No. 130, Reporting Comprehensive Income establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. It requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. SFAS No. 130 requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid in capital in the equity section of a statement of financial position. The Company's comprehensive income does not differ from its reported net income. Note 10: Business Segments The Company has five business segments: (a) Manufacture of night sights for handguns, (b) Manufacture of "the Gripper", a patented device used for climbing steel surfaces, (c) Manufacture of an Emergency Magnetic-Hydraulic Sea Patch System (d) Importation and resale of firearms and (e) Manufacture and Distribution of a Tire Sealant product. The majority of the Company's sales are derived from sales of night sights. Segments sales, other than by Trident, are not material to these financial statements. During the quarter ended Septemeber 30, 2000, Trident received an order from Great Mughal Trade Associates for 500 units of the Sea Patch. The terms of the order included a non refundable advance payment of $225,000.00. $75,000.00 was used to purchase raw materials to manufacture the order. The balance of the payment has been, or will be, used to defray the normal costs of manufacturing and overhead. The profit or loss on this order will not be determined until the fourth quarter of 2000. The revenues from this sale represent 26% and 57% of the Company's annual and fourth quarter revenues, respectively. There were no intersegment revenues or expenses. Since there were no material segment revenues or assets at the 1999 year end, none were reported. This contraxts with $225,000 in revenues and $75,000 in inventory at September 30, 2000. Note 11: Working Capital Advances During the first quarter of 2000, the Company received advances of funds from various individuals. These funds have been or will be used for operating capital funding current operations. All individuals have agreed to receive shares of the Company's common stock as repayment of the advances plus interest thereon. These shares of common stock will be issued by the Company during the quarter ending December 31, 2000. Note 12: Restatement of Prior Period Financials As disclosed in Note 4 to these financial statements and more fully disclosed in the December 31, 1999 audited financial statement notes, the Company's Chairman has earned 19,000,000 shares of the Company's common stock under a previous consulting agreement. These shares have not been issued and are noted on the balance sheet as "Common Stock Earned but not Issued." The Retained Earnings Deficit has been increased by $360,000 to reflect the charge to earnings for the periods affected by this charge. The first and second quarter Consolidated Balance Sheets have been restated to reflect this unissued common stock. As Previously Issued As Restated --------------------- --------------------- 3/31/2000 3/31/1999 3/31/2000 3/31/1999 ---------- --------- --------- --------- Stocks Earned, Not Issued 0 0 360,000 360,000 Retained Earnings (Deficit) (3,553,316) (2,005,066)(3,553,316)(2,365,066) 6/30/2000 6/30/1999 6/30/2000 6/30/1999 ---------- --------- ---------- ---------- Stock Earned, Not Issued 0 0 360,000 360,000 Retained Earnings (Deficit) (3,744,928) (2,044,484)(4,104,928)(2,404,484) Note 13: Restatement of September 30, 2000 Financials During the third quarter of fiscal 2000, Great Molgul Trade Associates made a non refundable prepayment on the purchase of 500 sea patches from Trident. Since the prepayment was non refundable in the event that Great Molgul elected not to take delivery of this order, the Company recorded the prepayment as revenue in the third quarter. These financial statements have been restated to reclassify the prepayment as deferred revenue. The Company will recognize these revenues as the patches are delivered, in proportion to the total sea patch kits to be purchased under the contract as a whole. As previously issued As Restated Balance Sheet: -------------- Inventories $ 535,099 $ 610,099 Deferred Revenue 0 $ 225,000 Retained Earnings (Deficit) $(4,201,602) $(4,351,602) Stockholders' Equity $ 904,825 $ 754,825 Statement of Operations: 3 months ended 9/30/00 9 months ended 9/30/00 ------------------------ ---------------------- ---------------------- As As previously As previously As Issued Restated Issued Restated ------------- ----------- ------------- ----------- Total Sales $ 388,080 $ 163,080 $ 836,425 $ 611,425 Cost of Sales $ 225,996 $ 150,996 $ 635,606 $ 562,606 Gross Profit $ 162,084 $ 12,084 $ 198,819 $ 48,819 Net Income $ (133,304) $ (283,304) $(1,136,889) $(1,286,889) Earnings(Loss) per share $ (0.00) $ ($0.00) $ (0.02) $ (0.02) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS The Company's current revenue is derived from sales of product by its four operating subsidiaries as follows: 1. Innovative Weaponry Incorporated. Innovative Weaponry Incorporated and its line of P-T Night Sights will always strive to make a great product even better. We therefore utilize the input and suggestions from our vast customer base to constantly enhance and upgrade our sight line. Our talented machinists and gunsmiths can then engineer a product which meets the approval of the shooting public. We have been known for our fixed tritium sights for years. In the 3Q00 we have begun proto-typing adjustable sights for those shooters desiring that particular quality in a sight system. More and more shooters have asked us to develop a durable adjustable sight which isn't cost prohibitive. We feel secure that we have the personnel and manufacturing capability to do just that. Incorporating a complete line of adjustable sights to complement our fixed sights, in 3Q00 we have designed and manufactured some proto-type sights using fiber optic material. Fiber optic utilizes ultra-violet rays and transmits these rays through a tube giving the shooter a phenomenal daytime sight picture. These fiber optic strands come in various colors giving the shooter various choices. Manufacturing both adjustable sights and fiber optic sights would be a logical and easy transition for Innovative Weaponry as everything is in place for a transition such as this to occur. 2. Trident Technologies Corporation. Trident Technologies Corporation "TTC," acquired a new manufacturing facility (11634 Darryl Drive, Baton Rouge, LA 70815). The building is situated on three lots and consists of a total of 9000 square feet. This move allows for easier access to the industrial sector of Baton Rouge, making day-to-day activities more efficient. The warehouse area will house a machining division as well as all uninstalled kit components and emergency response equipment. The adjoining lots will serve as a complete training facility having all of the scenarios needed to completely train anyone on the use of the Sea Patch, Pro Mag Kits. After demonstrating the Kits to numerous Industrial Response Personnel, the need has arisen for the Kits to be made out of different materials. We now offer the Sea Patch Kit as well as the Pro Mag Kit in an all stainless steel version, an all carbon steel version as well as the Standard Aluminum/Stainless Steel version. All components are powder-coated and electro-polished giving them superior corrosion resistance as well as cosmetic appeal. The magnets will also come housed in a brass "Sheath" therefore reducing spark. The Pro Mag Kits have been accepted as both classroom and field training tools at three of the largest HAZMAT training facilities in the world. They are: The Louisiana Emergency Response Training Center in Holden, LA, The Emergency Response Training Program at the Transportation Technology Center in Pueblo, CO, and the Texas Engineering Extension Service, Emergency Services Training Institute at Texas A&M, in College Station, TX. This allows every HAZMAT technician that trains at one of these facilities to train in an actual leak scenario using the Pro Mag Systems. TTC has increased its sales staff by adding three new salespersons. Ron Gorsline is working the Virginia Beach, VA area, Ed Drew is working the Houston, TX area and Jeff Bailey will be in-house coordinating sales efforts as well as working the industrial sectors. Ron is retired Navy having retired from the SEAL Teams in October 1997. He is working extensively on sales to the Navy, Coast Guard, and Virginia Area Shipping Industry. Ed Drew is retired Coast Guard having spent many years in the Houston area and currently consults for many of the largest shipping companies in the U.S. Jeff Bailey will be joining the sales team in 1Q01. He is currently employed by Nalco/Exxon and has 20 years of sales experience in the petro-chemical industry. The Response Team successfully stopped an acid leak in the Mississippi River for one of the country's largest inland barge companies. The call was made and within minutes of arrival, the leak was stopped and the situation was under control. The use of the Sea Patch allowed the barge to safely travel up-river and easily off load with no threat to the environment or workers. TTC has entered into sales agreements with Kirby Inland Marine, BASF Germany, Hammond Louisiana Fire Department as well as Rubicon Chemical. They also have verbal agreements with the Louisiana State Police, Louisiana Department of Environmental Quality, and numerous others as the new 2001 budget goes into place. TTC will be attending three shows in 4Q00. Those shows are the Fire Chief's Convention in Maui, HI, the Clean Gulf 2000, and the International Workboat Show. Both of the later shows will be held in New Orleans, LA. 3. Griffon USA, Inc. Griffon USA, Inc. ("Griffon"), imports a .45 caliber semi-auto pistol from Continental Weapons (Pty) located in South Africa. Combat Handguns featured the Griffon pistol in an article appearing in their June issue. The article was well received and generated interest across the country. Guns & Ammo published a feature article in their November issue. We have also advertised in Shot Business, which caters to the firearm business owners. The Griffon has been well received by numerous gun writers from various magazines. Several independent testing facilities, gun ranges and police departments have evaluated the pistol and recommend it highly. We feel this pistol satisfies a niche market because of its price and features that come as standard equipment, not found on similarly priced competitive models. Standard equipment includes P-T tritium night sights, beavertail grip safety, Commander hammer, aluminum trigger, extended slide shop and thumb safety, full length guide rod, beveled magazine well and Pearce grips. Griffon USA Inc. will soon be offering both a full size 1911 as well as the Commander version. We also intend to make a Custom version designed for the more discriminating shooter. This particular pistol will be targeted for those individuals demanding a higher degree of fit and finish. These pistols will be built one at a time to the customer's specifications, which may include carry pistols, target pistols and IDPA or IPSIC style race guns. We intend to showcase the Custom Shop pistol at the Shot Show next year in New Orleans. 4. TRADE PARTNERS INTERNATIONAL, INC. Continuing in 2000, Trade Partners International, Inc. ("Trade Partners") continued to work with William Baylor, formerly a principal of Vee Tubes USA, a bicycle inner tube company, based in Olney, IL. Mr. Baylor is a 25-year veteran in the bike industry. In August 2000 the company was presented with an opportunity to acquire "Bike Doctor," a privately owned California company. Bike Doctor was established five years ago with sales to a major distributor of bicycle parts and accessories and to regional dealers. The company has signed a letter of intent to acquire "Bike Doctor" with expected completion by year-end 2000. Mr. Bayler is in the process of obtaining information, customer data, meeting with vendors and sales representatives. Bike Doctor has great potential to expand its sales throughout North America and Internationally. REVENUES Our primary source of revenue during the three months ended September 30, 2000 continued to be from the sales of PT Night Sights. The political issues surrounding handgun registration and ownership may contribute to a continuing softening of sales. In addition, the U.S. Presidential election outcome may dramatically affect sales in the future either positively or negatively depending on which candidate wins. Trident Technologies, Inc. currently has a contract with Great Mughal Trade Association (GMTA), for 500 Sea Patches. The contract specifies a non-refundable payment of $200,000.00, a second installment of $200,000.00 during the manufacturing process and a third installment payable when the order is complete and ready to ship. The first installment of $200,000.00 was received in three wire transfers of $75,000.00 each totaling $225,000.00. This included $25,000.00 to apply against the second installment. COST OF SALES Cost of sales for PT Night Sights and Sea Patch consists primarily of material and labor costs. Cost of goods sold increased during the quarter due to the increased sales of the Sea Patch. MARKETING AND SALES EXPENSE During the 3Q00, we spent approximately $40,000.00 on print media, sales, and marketing, to keep our product circulating among gun enthusiasts and those targeted by the Sea Patch. This amount is slightly less than we spent during 2Q00. GENERAL AND ADMINISTRATIVE EXPENSE General and administrative expense is comprised primarily of compensation and related expenditures for administrative and executive personnel, professional fees associated with legal, consulting, accounting services, and general corporate overhead. LIQUIDITY AND CAPITAL RESOURCES. Our cash position, less known commitments and contingencies, plus outside financing received through September 30, 2000, plus cash generated from operations for the balance of fiscal year 2000 should be adequate to fund our on-going operations and to fund the further development of the Sea Patch and ProMag, including any patent applications. Although we should have improved operating results, we will still require substantial additional capital during fiscal 2000 to go into manufacture and marketing the Sea Patch following design modification and testing. Our capital requirements will depend on many factors, including, cash flow from operations, additional working capital requirements, additional product development expenses and capital expenditures. To the extent existing resources are insufficient to fund our operations in the short- or long-term, we will need to raise additional funds through public or private financings. We may not be able to raise additional financing on terms favorable to us or to our stockholders without substantial dilution of their ownership and rights. If we are unable to raise sufficient funds to satisfy either short- or long-term there would be substantial doubt as to our ability to continue as a going concern on either a consolidated basis or through continued operation of any subsidiary, and we may be required to significantly curtail our operations, significantly alter our business strategy, forego market opportunities, or obtain funds through arrangements with strategic partners or others that may require us to relinquish material rights to certain of our technologies or potential markets. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no material legal proceedings to which we are a party or which any of our property is the subject other than ordinary, routine claims incidental to our business. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS Exhibit 27 Financial Data Schedule REPORTS ON 8-K During the Company's third quarter ending 9/30/00, the following Current Report was filed on Form 8K: Item 4, Resignation of Accountant, Alvin L. Dahl & Associates, and Item 7, Letter from Alvin L. Dahl attached as exhibit. The date of the event was 08/14/00 and the report was filed with the SEC on 8/21/00. No financials were filed. During the Company's third quarter ending 9/30/00, the following Current Report was filed on Form 8K: Item 4.appointment of new accountant, Tuner, Stone & Company. The date of the event was 09/06/00 and the report was filed with the SEC on 09/07/00. No financials were filed. During the Company's third quarter ending 9/30/00, the following Current Report was filed on Form 8K: Item 2, Acquisition of Assets of Estate of John Unertl. The date of the event was 09/07/00 and the report was filed with the SEC on 09/07/00. No financials were filed. Subsequent to the Company's third quarter ending 9/30/00, the following Current Report was filed on Form 8K: Item 2, Acquisition of Assets of Bike Doctor. The date of the event was 09/26/00 and the report was filed with the SEC on 10/02/00. No financials were filed. SIGNATURES 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 thereto duly authorized. 21ST Century Technologies, Inc. _______________________________ Registrant 01/16/01 /s/ Kenneth E. Wilson _________________________ _________________________ Date Kenneth E. Wilson