-----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, I/yC1UkC3umtP4Fz9ochk6dhyrf+lYDNGWer21ssCgVtFBb2iR1C9ZHyZmrk/eAb 9SOcPKBpRK/mLe6kUynIvw== 0001092306-03-000237.txt : 20030520 0001092306-03-000237.hdr.sgml : 20030520 20030520163939 ACCESSION NUMBER: 0001092306-03-000237 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: 21ST CENTURY TECHNOLOGIES INC CENTRAL INDEX KEY: 0001090870 STANDARD INDUSTRIAL CLASSIFICATION: ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) [3480] IRS NUMBER: 481110566 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-29209 FILM NUMBER: 03712847 BUSINESS ADDRESS: STREET 1: 5050 EAST BELKNAP CITY: HALTOM CITY STATE: TX ZIP: 76117 BUSINESS PHONE: 8172840099 MAIL ADDRESS: STREET 1: 5050 EAST BELKNAP CITY: HALTOM CITY STATE: TX ZIP: 76117 10QSB 1 form10qsb.txt FORM 10-QSB DATED 03-31-03 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _________________ to _________________ Commission file number: 000-29209 21ST CENTURY TECHNOLOGIES, INC. _________________________________________________________________ (Exact name of small business issuer as specified in its charter) Nevada 48-1110566 ____________________________________ _________________________________ (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 5707 CORSA AVENUE, SUITE 103, WESTLAKE VILLAGE, CALIFORNIA 91362 ________________________________________________________________ (Address of principal executive offices) (818) 707-9466 ___________________________ (Issuer's telephone number) ________________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) 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: 113,980,802 as of April 16, 2003. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] 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, MMC gun sights and the SeaPatch/ProMag), (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. INDEPENDENT ACCOUNTANTS' REPORT Board of Directors and Stockholders 21st Century Technologies, Inc. and subsidiaries We have reviewed the accompanying consolidated balance sheet of 21st Century Technologies, Inc. and subsidiaries as of September 30, 2002 and the related consolidated statements of operations and cash flows for the nine months then ended. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. /s/ TURNER, STONE & Company, L.L.P. ____________________________________ Turner, Stone & Company, L.L.P. Certified Public Accountants Dallas, Texas May 19, 2003
21ST CENTURY TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) MARCH 31, 2003 MARCH 31, 2002 ______________ ______________ ASSETS CURRENT ASSETS: Cash and cash equivalents $ - $ 126,302 Accounts Receivable, net 144,929 1,071,222 Inventories 499,612 820,704 Advances to Stockholders, net 109,216 207,878 ___________ __________ Total Current Assets 753,757 2,226,106 Property, Plant, and Equipment, Net 1,169,532 1,722,458 Other Assets, Net 543,393 826,505 ___________ __________ Total Assets $ 2,466,682 $4,775,069 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts Payable-trade $ 986,703 $1,041,168 Accounts Payable-other - 698,663 ___________ __________ Total Current Liabilities 986,703 1,739,831 OTHER LIABILITIES: Notes Payable 250,079 346,698 Advances from Stockholders 550,780 193,829 ___________ __________ Total Other Liabilities 810,859 540,527 ___________ __________ TOTAL LIABILITIES: 1,787,562 2,280,358 ___________ __________ MINORITY INTEREST-MMC 3,158 3,158 STOCKHOLDERS' EQUITY: Preferred Stock, $.001 par value,50,000,000 shares at $.001 shares authorized,1,200,000 and 0 shares issued and outstanding at March 31, 2003 and 2002 respectively 1,200 - Common Stock,$.001 par value, 300,000,000 shares authorized, 113,980,802 and 1,643,135 shares issued and 112,080,802 and 1,643,135 shares outstanding at March 31, 2003 and 2002, respectively 113,981 1,643 Paid-in Capital 14,286,323 13,634,086 Stock Earned, Not Issued - 360,000 Retained Earnings (Deficit) (13,725,542) (11,484,732) Treasury Stock - (16,444) Stock Subsriptions - ( 3,000) ___________ __________ Total Stockholders' Equity 675,962 2,491,553 Total Liabilities and Stockholders' Equity $ 2,466,682 $4,775,069 =========== ==========
See Notes to Consolidated Financial Statements
21ST CENTURY TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 3 MONTHS ENDED 3 MONTHS ENDED MAR 31, 2003 MAR 31, 2002 ______________ ______________ Net Revenues $ 172,278 $ 728,758 Cost of Revenues 171,533 289,907 ___________ __________ Gross Profit 745 438,851 Operating Expenses: Advertising & Selling 5,448 34,593 General and administrative expenses 124,856 154,963 Depreciation and Amortization 55,757 82,183 Compensation Costs 82,091 124,614 ___________ __________ Total Operating Expenses 268,152 396,293 ___________ __________ Net Income (Loss) (267,407) 42,558 Estimated Income Taxes 0 0 ___________ __________ NET INCOME (LOSS) $ (267,407) $ 42,558 =========== ========== EARNINGS (LOSS) PER COMMON SHARE: Basic $ (0.00) $ (0.00) Fully Diluted $ (0.00) $ (0.00)
See Notes to Consolidated Financial Statements
21ST CENTURY TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED) 2003 2002 _________ _________ Cash flows from operating activities: Net income (loss) $(267,407) $ 42,558 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 32,733 45,987 Amortization 20,808 36,136 Common stock issued for services 6,300 37,500 Changes in operating assets and liabilities Accounts receivable, trade (1,505) (685,317) Inventories 2,094 42,300 Prepaid expenses 10,450 25,093 Other assets - (134,966) Accounts payable, trade 78,082 164,707 Accrued expenses (16,824) 533,107 _________ _________ 132,138 64,547 _________ _________ Cash used in operations (135,269) 107,105 _________ _________ Cash flows from investing activities: Purchase of property and equipment Repayment of stockholder advances 3,375 Advances to stockholders (3,316) _________ _________ Cash used in investing activities 3,375 (3,316) _________ _________ Cash flows from financing activities: Advances from officer Repayment of notes payable (1,006) (78,437) Advances from stockholders 115,400 93,729 Issuance of common stock 17,500 _________ _________ Cash provided by financing activities 131,894 15,292 _________ _________ Net increase (decrease) in cash - 119,081 Cash at beginning of period - 7,221 _________ _________ Cash at end of period $ - $ 126,302 _________ _________
See Notes to Consolidated Financial Statements 21st CENTURY TECHNOLOGIES,INC. AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (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, 2001 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, 2002. NOTE 2: 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. During the year ended December 31, 2002, the Company determined the license was no longer cost beneficial and stopped paying its royalty and annual maintenance fees causing the license to expire. As a result, the Company charged to continuing operations in the year ended December 31, 2002, the unamortized carrying value of the license totaling $49,160. 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 3: STOCKHOLDERS' EQUITY The total number of all classes of authorized capital stock is 350,000,000 shares, 300,000,000 of which are Common Stock, $0.001 par value per share and 50,000,000 are Preferred Stock, $0.001 par value per share. As of March 31, 2003, there are 113,980,802 shares of common stock issued and 112,080,802 outstanding and 1,200,000 shares of Preferred Stock issued and outstanding. NOTE 4: 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 2003 and 2002. There were no common stock equivalents outstanding during the years 2003 and 2002. 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 MARCH 31, 2003 INCOME SHARES PER-SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ___________ _____________ ______ Income ($267,407) BASIC EPS Income available to Common Stockholders (267,407) 113,980,802 $(0.00) EFFECT OF DILUTIVE SECURITIES None NOTE 5: INCOME TAXES At March 31, 2003, the Company has available net operating loss carryforwards of approximately $13,725,542 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 of $4,432,891. 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 $4,432,891 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 6: 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 7: 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, 2002 and 2000 represent fair value. NOTE 8: 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 9: STOCK OPTION PLAN On August 6, 2002 the Company established the 2002 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan (the Plan) as a way of attracting and retaining highly qualified and experienced directors, employees and consultants and to give them a continued proprietary interest in the success of the Company and its subsidiaries. Additionally, the plan is intended to encourage ownership of the Company's common stock. Pursuant to the Plan, as amended on February 20, 2003, the aggregate number of shares that may be optioned, subject to conversion, of issued is 10,000,000 shares of common stock, warrants, options, preferred stock or any combination thereof. NOTE 10: REVERSE STOCK SPLIT AND RECAPITALIZATION On February 20, 2003, the Company filed with the Secretary of State Nevada a certificate of amendment amending the Company's Articles of Incorporation, and pursuant to authorization by the Board of Directors and a majority of eligible shareholder votes, such amendment provided for a 100 to 1 reverse split of the Company's common stock. The amendment also increased the number of shares of all classes of capital stock to 350,000,000, of which 300,000,000 are to be shares of common stock with a par value of $.001, and further providing authorization for the issuance of preferred shares in such series and with such voting powers as may be determined by the Board. The shares may be issued by the Company from time to time as approved by the Board of directors without approval of the shareholders except as otherwise provided by the applicable Nevada law. On February 20, 2003, the Board adopted resolutions issuing 1,200,000 shares of Series A Convertible Preferred Stock with Certificate of Designations. The holder of Series A Convertible Preferred Stock may convert each such share of Series A convertible Preferred Stock to 10 shares of common stock and 1 share of Series B Convertible preferred Stock. The holder of Series A Convertible Preferred Stock Converted these shares into 12,000,000 shares of Common Stock and 1,200,000 shares of Series B Convertible Preferred Stock. Each share of Series B Convertible Preferred provides for 500 votes. Frederick Partners, a California partnership, as holder of Series B Preferred owns controlling votes in the Corporation. In July 2002, the Company distributed an offer under which the stockholders could elect to exchange common stock shares for preferred warrants. Each preferred warrant entitled the holder to purchase one share of common stock for $.01 and was automatically exercised for the difference, expressed in whole shares of post-split common stock, between the fair market value of one share of common stock and $.01 as a result of the above recapitalization. The exchange ratio and exercise price of the preferred warrants were not to be adjusted as a result of the above recapitalization. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. DESCRIPTION OF SUBSIDIARIES. The Company had 7 wholly owned subsidiaries at the end of the first quarter of 2003. The three subsidiaries with active operations include: 1. Innovative Weaponry Inc. Innovative Weaponry is a manufacturer of tritium products available in night sights and other "night seeing" sights in the weapons industry. Law enforcement, military and private gun owners currently purchase tritium-based night sights with additional applications currently in the process of research and development. Innovative Weaponry products feature tritium sights with the front sight designed to be brighter than the rear sight which enhances low light sighting. Innovative Weaponry products have been sold to original equipment manufacturers, certain members of the United States military establishment (including two Navy Seal Teams, the Customs Service and the DEA) and numerous retail outlets for purchase by the general public. In addition, numerous law enforcement agencies at the state and local level on a nationwide basis are customers for Innovative Weaponry's night sights, including major police departments, such as the Los Angeles Police Department. Innovative Weaponry night sight products are sold under the name "PT Night Sights"(TM), a federally-trademark protected name. Available in a variety of colors, the product consists basically of a 3-dot night sight using the radioactive isotope tritium encapsulated in phosphor-lined glass. Beta particles emitted by the tritium excites the phosphors, causing a substantial glow, providing sight pictures in low light and no light situations. Innovative Weaponry has also designed and manufactured some prototype sights using fiber optic material, utilizing ultra-violet rays and transmits them through the glass fibers, giving the shooter a phenomenal daytime sight picture. 2. Trident Technologies Inc. Trident Technologies Inc. manufactures and distributes SeaPatch and ProMag magnetic-powered leak and rupture sealing devices. Designed for application on ferrous hulls of ships, railroad tank cars, storage tanks, pipelines or other containers. Powered by high technology composite permanent magnets, SeaPatch and ProMag operate in similar ways, with some structural differences reflecting either marine or dry land applications. Using a unique "cam-on/cam-off" device, these powerful yet easy to apply leak sealing systems have a broad range of applications in both disaster situations and environmental hazmat protection. 3. Miniature Machine Corporation, Inc. Acquired in March, 2001, Miniature Machine Corporation, Inc. manufactures and distributes high-quality adjustable open gun sights. Manufactured with watch-like precision, Miniature Machine sights can be enhanced by application of tritium-powered sighting materials, such as employed in PT Night Sights (above described). These upscale sights are marketed mainly to serious hobbyists, but interest is being displayed by law enforcement agencies. 4. Hallmark Human Resources, Inc. Operations of this subsidiary have been discontinued. 5. Griffon, USA, Inc. Operations of this subsidiary have been discontinued. 6. Trade Partners International Operations of this subsidiary have been discontinued. 7. 2826 Elm Street, Inc. Assets of this corporation were sold in the second quarter of 2002, but 21st Century Technologies, Inc. still retains the coporate shell which had no activity during the quarter. RESULTS OF OPERATIONS INCOME STATEMENT The Company ended the first quarter of 2003 with a loss of $267,407 as compared to a gain of $42,558 in the first quarter of 2002. The loss is primarily due to expenses related to the recapitalization which occurred in the first quarter of 2003 and a temporary decrease in sales. Net revenue decreased from $728,758 in the three months ended March 31, 2002 to $172,278 in the three months ended March 31, 2003. Management continued their focus on reducing General and Administrative expense with a 32% reduction from $396,293 in the first quarter of 2002 to $268,152 in the first quarter of 2003. BALANCE SHEET Total assets decreased from $4,775,069 to $2,466,682 respectively in the first quarter of 2002 and 2003. This reflects management's current attempts to collect receiveables and reduce inventory in stock as well as the 2002 year-end write off and reserving of notes and accounts receiveables and licenses deemed uncollectible or unuseful. Accounts receiveable decreased 86% from $1,071,222 on March 31, 2002 to $144,929 on March 31, 2003. Inventory decreased 39% from $820,704 to $499,612 during the same respective periods. Current liabilities were reduced $753,128 or 43% from $1,739,831 on March 31, 2002 to $986,703 on March 31, 2003. Total Liabilities were reduced from $2,280,358 to $1,787,562 for the same respective periods. FACTORS AFFECTING LIQUIDITY AND CAPITAL RESOURCES The Company is dependent upon cash on hand, revenues from the sales of its products, and its ability to raise cash through the sale of its shares. At present, the Company needs cash for monthly operating expenses in excess of its historic sales revenues. The Company will continue to require additional capital funding until sales of current products increase and sales of products under Trident is fully established. The Company intends to finance further growth through both debt and equity offerings, which will further dilute current shareholders' interests. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. 1) Patricia Wilson Litigation-Suit by former officer, director and shareholder against the company and individual directors for breach of employment contract, wrongful termination, negligent investigation, breach of fiduciary duty and defamation. This suit is pending in the 153rd District court of Tarrant County, Texas in Cause No. 153-189311-01. It appears at this time that Plaintiff cannot legally prevail on many of her claims because they do not belong to her individually. As to the breach of contract claim, we believe that Plaintiff will be unable to establish a legally enforceable contract. 2) Bike Doctor - In the year 2000 21st Century agreed to purchase the assets of Bike Doctor, a manufacturer of bicycle tire sealant, for $150,000. 21st Century made an initial payment of $5000.00 but failed to pay the balance and has now indicated that it does not intend to go through with the deal. Suit was subsequently filed in March 2002 in U.S. District Court for the State of California, Central Division, Cause No. CV-0201927 for the balance of the contract amount ($145,000.00) and punitive damages. This suit has recently been filed and is in the discovery phase. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS UNTO A VOTE OF SECURITY MATTERS On January 17, 2003 and January 30, 2003 respectively, the company filed a Pre 14C and a Def 14C with the Securities and Exchange Commission describing the recapitalization. ITEM 5. OTHER INFORMATION On February 20, 2003, the Company filed a Form S-8 with the Securities and Exchange Commission. This filing authorizes the Company to issue stock to various employees, officers, directors and consultants. ITEM 6(A). EXHIBITS Exhibit # Description _________ ____________ 99.1 Certification - CEO 99.2 Certification - CFO ITEM 6(B). REPORTS ON FORM 8-K. Subsequent to the quarter end on April 21, 2003 a Form 8-K was submitted to the Secutities and Exchange Commission reporting the removal of Fred Rausch and Dave Gregor as Directors of the corporation. 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, thereunto duly authorized. Additionally, the undersigned hereby certify the correctness and completeness, in all material respects, of the information contained in this quarterly report and their responsibility for the Company's internal controls and the periodic evaluation of such internal controls. 21ST CENTURY TECHNOLOGIES, INC. _______________________________ (Registrant) Date 5/19/03 /s/ ARLAND D. DUNN _______ _________________________________ Arland D. Dunn Chief Executive Officer/President Date 5/19/03 /s/ ALVIN L. DAHL _______ _________________________________ Alvin L. Dahl Chief Financial Officer 21ST CENTURY TECHNOLOGIES, INC. I, ARLAND D. DUNN, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of 21st Century Technologies, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b.) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "EVALUATION DATE"); and c.) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. DATED: MAY 19, 2003 21ST CENTURY TECHNOLOGIES, INC. ________________________________ (Registrant) /s/ ARLAND D. DUNN _________________________________ Arland D. Dunn Chief Executive Officer/President 21ST CENTURY TECHNOLOGIES, INC. I, ALVIN L. DAHL, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of 21st Century Technologies, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b.) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "EVALUATION DATE"); and c.) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. DATED: MAY 19, 2003 21ST CENTURY TECHNOLOGIES, INC. ____________________ ________________________________ (Registrant) /s/ ALVIN L. DAHL _______________________ Alvin L. Dahl Chief Financial Officer EX-99.1 3 exhibit99-1.txt CERTIFICATION OF CEO EXHIBIT 99.1 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 21st Century Technologies, Inc. on Form 10-QSB for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. Date 5/20/03 /s/ ARLAND D. DUNN _______ _________________________________ Arland D. Dunn, Chief Executive Officer/President EX-99.2 4 exhibit99-2.txt CERTIFICATION OF CFO EXHIBIT 99.2 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 21st Century Technologies, Inc. on Form 10-QSB for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. Date 05/20/03 /s/ ALVIN L. DAHL ________ ________________________ Alvin L. Dahl, Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----