-----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, CM9kiMT+B8WS5fVdOx7+iLOhWIxBz8dLeWRZwnF8Hg62JqovhEd0xwEN6wcBQiZb pVb/+C0cjBMsdbCbCocp+Q== 0000910647-99-000203.txt : 19990810 0000910647-99-000203.hdr.sgml : 19990810 ACCESSION NUMBER: 0000910647-99-000203 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEGATECH CORP CENTRAL INDEX KEY: 0000064708 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PUBLISHING [2741] IRS NUMBER: 042461059 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-09643 FILM NUMBER: 99681021 BUSINESS ADDRESS: STREET 1: 525 WOBURN STREET CITY: TEWKSBURY STATE: MA ZIP: 01876 BUSINESS PHONE: 6172731900 MAIL ADDRESS: STREET 1: 525 WOBURN STREET CITY: TEWKSBURY STATE: MA ZIP: 01876 10-Q 1 BODY OF 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC. 20549 FORM 10-Q (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _______________ Commission file number 0-9643 MEGATECH CORPORATION (Exact name of registrant as specified in its charter) Massachusetts 04-2461059 (State or other jurisdiction of (IRS. Employer incorporation of organization) Identification No.) 555 WOBURN Street, TEWKSBURY, MA 01876 (Address of principal executive offices) (Zip Code) (978) 937-9600 (Registrant's telephone number, including area code) _________________________________________________ (Former name, former address and former fiscal year, if changed since last report) 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. Yes (X) No ( ) There were 3,812,308 shares of common stock outstanding at August 4, 1999. -1- MEGATECH CORPORATION QUARTERLY REPORT FORM 10-Q June 30, 1999 PART 1. FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) Page Balance Sheet - June 30, 1999 and December 31, 1998 3 Statement of Operations- for the quarter and six months ended June 30, 1999 and June 30, 1998 4 Statement of Cash Flows- for the six months ended June 30, 1999 and June 30, 1998 5 Notes to Financial Statements- June 30, 1999 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 9 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 9 ITEM 2. Changes in Securities and Use of Proceeds 9 ITEM 3. Defaults Upon Senior Securities 9 ITEM 4. Submission of Matters to a Vote of Security Holders 9 ITEM 5. Other Information 9 ITEM 6. Exhibits and Reports on Form 8-K 9 Signature Page 10 -2- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MEGATECH CORPORATION BALANCE SHEET
JUNE 30, 1999 DEC. 31, 1998 (UNAUDITED) (AUDITED) ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 183,150 $ 187,580 Accounts receivable: Trade 100,084 101,502 Affiliate 0 355 Other 765 13,794 Inventories 310,510 399,868 Prepaid expenses 4,954 5,464 ---------------------------- Total current assets 599,463 708,563 ---------------------------- Property, plant and equipment, net 66,191 72,145 Other assets 7,666 7,666 ---------------------------- Total Assets $ 673,320 $ 788,374 ============================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts Payable: Trade $ 102,307 $ 163,729 Affiliate 1,785 0 Accrued Liabilities 84,650 214,358 ---------------------------- Total current liabilities 188,742 378,087 ---------------------------- Note payable 25,000 0 Stockholders' equity: Common Stock, par value $.0143 per share, 5,000,000 shares authorized; 3,812,308 shares issued and outstanding 54,230 54,230 Additional paid-in capital 4,013,947 4,013,947 Deficit (3,608,599) (3,657,890) ---------------------------- Total stockholders' equity 459,578 410,287 ---------------------------- Total liabilities and stockholders' equity $ 673,320 $ 788,374 ============================
See notes to financial statements. -3- MEGATECH CORPORATION STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED QUARTER ENDED ------------------------------ ------------------------------ JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1999 JUNE 30, 1998 ------------- ------------- ------------- ------------- Sales $ 984,016 $1,081,677 $ 463,362 $ 461,963 Cost of sales 536,694 604,452 232,224 241,857 ------------------------------------------------------------- Gross profit 447,322 477,225 231,138 220,106 ------------------------------------------------------------- Operating expenses: Selling 304,106 353,997 142,088 159,685 General and administrative 82,754 75,829 40,019 30,085 Research and development 10,876 11,080 5,487 3,820 ------------------------------------------------------------- Total operating expenses 397,736 440,906 187,594 193,590 ------------------------------------------------------------- Income from operations 49,586 36,319 43,544 26,516 ------------------------------------------------------------- Other income (expense): Interest 2,930 0 1,263 0 Other (3,225) (189) (3,225) 14 ------------------------------------------------------------- Other income (expense), net (295) (189) (1,962) 14 ------------------------------------------------------------- Net income $ 49,291 $ 36,130 $ 41,582 $ 26,530 ============================================================= Net income per share - basic and diluted $ 0.013 $ 0.010 $ 0.011 $ 0.007 ============================================================= Weighted average number of common 3,812,308 3,792,308 3,812,308 3,792,308 =============================================================
See notes to financial statements. -4- MEGATECH CORPORATION STATEMENT OF CASH FLOWS
SIX MONTHS ENDED ------------------------------ JUNE 30, 1999 JUNE 30, 1998 ------------- ------------- Cash flows from operating activities: Net income (loss) $ 49,291 $ 36,130 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,952 9,791 Changes in operating assets and liabilities: Accounts receivable 14,802 36,367 Prepaid expenses 510 5,848 Inventories 89,358 36,426 Accounts payable (59,637) (111,499) Accrued expenses (129,708) 19,633 -------------------------- Net cash provided (used) by operating activities (26,432) 32,696 -------------------------- Cash flows from investing activities: Purchases of property and equipment (6,224) (6,951) Sales of property and equipment 3,226 0 -------------------------- Net cash provided (used) by investing activities (2,998) (6,951) Cash flows from financing activities: Principal payments on notes payable 0 (25,000) Advances on notes payable 25,000 35,000 -------------------------- Net cash used by financing activities 25,000 10,000 -------------------------- Net increase (decrease) in cash and cash equivalents (4,430) 35,745 Cash & cash equivalents, beginning of period 187,580 55,026 -------------------------- Cash & cash equivalents, end of period $ 183,150 $ 90,771 ==========================
See notes to financial statements. -5- MEGATECH CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 1. BASIS OF PRESENTATION: - ---------------------------- The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows have been included. Operating results for interim periods are not necessarily indicative of the operating results that may be expected for the full year. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K. 2. INVENTORIES: - ------------------ Inventories consisted of the following:
JUNE 30, 1999 DEC. 31, 1998 ------------- ------------- Raw materials $160,131 $186,176 Work in process 24,388 37,477 Finished goods 125,991 176,215 ------------------------ 310,510 399,868 ========================
3. MAJOR CUSTOMER INFORMATION: - --------------------------------- For the period ended June 30, 1999 and 1998, sales to one and four unrelated sales representatives comprised 66% and 50% of total sales, respectively. -6- ITEM 2. MEGATECH CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR QUARTER AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 RESULTS OF OPERATIONS: - ---------------------- Quarter Ended June 30, 1999 compared to quarter ended June 30, 1998 Sales for the quarter ended June 30, 1999 were $463,362, compared to $461,963 for the same quarter last year. The increase was primarily due to an increase in international sales. Gross profit for the quarter ended June 30, 1999 was $231,138 or 50% of sales, compared to $220,106 or 48% of sales, for the same quarter last year. The increase is the result of lower direct labor costs and raw material costs. Operating expenses for the quarter ended June 30, 1999 were $187,594 or 40% of sales, compared to $193,590 or 42% of sales, for the same quarter last year. The decrease is due to a decrease in selling and marketing costs. The net income for the quarter ended June 30, 1999 was $41,582 compared to net income of $26,530 for the same quarter last year. The increase is the result of the items discussed above. Six months Ended June 30, 1999 compared to six months ended June 30, 1998 Sales for the six months ended June 30, 1999 were $984,016, compared to $1,081,677 for the same period last year. The decrease was due to production delays and slow deliveries. Gross profit for the six months ended June 30, 1999 was $447,322 or 45% of sales, compared to $477,225 or 44% of sales, for the same period last year. The increase as a percentage of sales is the result of a decrease in direct labor and material costs, and an increase in sales prices. Operating expenses for the six months ended June 30, 1999 were $397,736 or 40% of sales, compared to $440,906 or 41% of sales, for the same period last year. The decrease is attributable to a decrease in selling and marketing costs. The net income for the six months ended June 30, 1999 was $49,291 compared to net income of $36,130 for the same period last year. The increase is the result of the items discussed above. -7- LIQUIDITY AND CAPITAL RESOURCES: - -------------------------------- Working capital as of June 30, 1999 was $410,721 compared to $317,512 in working capital at December 31, 1998. The increase is attributable to the net income for the quarter. The company maintains a secured line of credit in the amount of $100,000. At June 30, 1999, no borrowings were outstanding under this line. The company believes that cash generated from operations, together with existing sources of debt financing, will be sufficient to meet foreseeable cash requirements for the next twelve months. The firm's backlog as of June 30, 1999 was approximately $535,290 compared to $326,670 for same period ended in 1998. The Company is taking steps in 1999 to address Year 2000 readiness regarding manufacturing operations and internal systems. Outside computer consultants are being utilized to upgrade hardware and software required to become Year 2000 compliant. The estimated cost of such upgrades is approximately $15,000. As of June 30, 1999, the Company has incurred $2,484 in hardware upgrade costs. In addition to internal system upgrades, key suppliers of raw materials for manufacturing operations will be contacted to determine their readiness for Year 2000. In the event that a key supplier experiences Year 2000 problems, the Company believes that it has sufficient alternative suppliers to satisfy raw material needs. -8- MEGATECH CORPORATION ITEM 3. QUANITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. PART II: OTHER INFORMATION Item 1. Legal Proceedings: None. - --------------------------- Item 2. Changes in Securities: None. - ------------------------------ Item 3. Defaults Upon Senior Securities: None. - ---------------------------------------- Item 4. Submission of Matters to a Vote of Security Holders: None. - ------------------------------------------------------------ Item 5. Other Information: None. - -------------------------- Item 6. Exhibits and Reports on Form 8-K: None. - ----------------------------------------- -9- SIGNATURES ---------- Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEGATECH CORPORATION (Registrant) August 4, 1999 /s/ Vahan V. Basmajian - -------------- ---------------------- Date Vahan V. Basmajian President, Treasurer -10- EX-27 2 FDS FOR 2ND QUARTER
5 6-MOS DEC-31-1999 JUN-30-1999 183,150 0 100,849 10,166 310,510 599,463 66,191 398,104 673,320 188,742 0 0 0 54,230 0 673,320 984,016 986,946 447,322 397,736 3,225 0 0 49,291 0 49,291 0 0 0 49,291 0.013 0.013
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