-----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, GsmurjlqBxdUx5IHP/zt1Gk8YcGCPhP9fUm3WleQQic/LFDf06mKiRXO3TSOTb0j KXdrp8eDvq63KtaBbqPs6Q== /in/edgar/work/20000914/0000912057-00-041397/0000912057-00-041397.txt : 20000922 0000912057-00-041397.hdr.sgml : 20000922 ACCESSION NUMBER: 0000912057-00-041397 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20000914 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARBOR ENTECH CORP CENTRAL INDEX KEY: 0000710782 STANDARD INDUSTRIAL CLASSIFICATION: [2400 ] IRS NUMBER: 222335094 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-30432 FILM NUMBER: 723071 BUSINESS ADDRESS: STREET 1: RD 1 STREET 2: BOX 1076 CITY: LITTLE MARSH STATE: PA ZIP: 16931 BUSINESS PHONE: 5703763217 MAIL ADDRESS: STREET 1: RD 1 BOX 1076 CITY: LITTLE MARSH STATE: PA ZIP: 16931 10QSB 1 a2025594z10qsb.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 0F 1934 For the period ended: July 31, 2000 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 0-30432 ARBOR ENTECH CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 22-2335094 -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) Route 349, RD 1, Box 1076, Little Marsh, PA 16931 ------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (570) 376-2217 -------------- ------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 / / Indicate the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date. Class Outstanding at July 31, 2000 ----- ---------------------------- Common Stock, par value $.001 per share 7,050,540 Transitional Small Business Format (check one): Yes / / No /X/ ARBOR ENTECH CORPORATION BALANCE SHEET JULY 31, 2000 (Unaudited) ASSETS Current Assets: Cash and Cash Equivalents $ 388,216 Accounts Receivable 31,287 Inventories 97,152 Other Current Assets 8,800 ----------- Total Current Assets 525,455 Property, Plant and Equipment (Net of Accumulated Depreciation of $59,842) 58,625 ----------- $ 584,080 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable and Accrued Liabilities $ 66,758 ----------- Total Current Liabilities 66,758 ----------- Commitments and Contingencies Stockholders' Equity: Common Stock, $.001 Par Value; Authorized 10,000,000 Shares; Issued and Outstanding 7,050,540 Shares 7,050 Additional Paid-In Capital 2,053,316 Retained Earnings (Deficit) (392,467) Notes Receivable - Related Parties (1,150,577) ----------- Total Stockholders' Equity 517,322 ----------- $ 584,080 =========== The accompanying notes are an integral part of the financial statements. 2 ARBOR ENTECH CORPORATION STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended July 31, ---------------------------- 2000 1999 ----------- ----------- Net Sales $ 92,654 $ 153,591 ----------- ----------- Costs and Expenses: Cost of Sales 46,816 75,259 Selling, General and Administrative Expenses 94,814 62,574 ----------- ----------- 141,630 137,833 ----------- ----------- Operating Income (Loss) (48,976) 15,758 ----------- ----------- Other Income (Expense): Net Loss on Trading Securities -- (111,183) Interest Income 2,889 3,360 Other -- -- Interest Expense -- (4,712) ----------- ----------- Total Other Income (Expense) 2,889 (112,535) ----------- ----------- Net Loss $ (46,087) $ (96,777) =========== =========== Earnings Per Common Share - Basic $ (.01) $ (.01) =========== =========== Weighted Average Shares Outstanding 7,050,540 7,050,540 =========== ===========
The accompanying notes are an integral part of the financial statements. 3 ARBOR ENTECH CORPORATION STATEMENT OF CASH FLOWS (Unaudited)
Quarter Ended July 31 -------------------------------- 2000 1999 ------------- ------------- Cash Flows from Operating Activities: Net Loss $ (46,087) $ (96,777) Adjustments to Reconcile Net Loss to Net Cash (Used) in Operating Activities: Depreciation 2,855 1,900 Loss on Sale of Trading Securities -- 111,183 Changes in Operating Assets and Liabilities: (Increase) Decrease in Accounts Receivable 3,234 (27,528) (Increase) in Inventories (33,794) (52,695) Purchases of Trading Securities -- (163,764,119) Proceeds from Sale of Trading Securities -- 163,652,936 (Increase) Decrease in Other Current Assets (8,800) 502 (Decrease) in Accounts Payable and Accrued Liabilities (7,316) (38,113) ------------- ------------- Total Adjustments (43,821) (115,934) ------------- ------------- Net Cash (Used) in Operating Activities (89,908) (212,711) ------------- ------------- Cash Flows from Investing Activities: Capital Expenditures (17,950) -- ------------- ------------- Net Cash (Used) in Investing Activities (17,950) -- ------------- ------------- Cash Flows from Financing Activities: Loans to Related Parties (22,560) (384,356) Capital Contributed 22,560 39,756 Proceeds of Loans from Related Party -- 4,302 ------------- ------------- Net Cash (Used) In Financing Activities -- (340,298) (Decrease) in Cash and Cash Equivalents (107,858) (553,009) Cash and Cash Equivalents - Beginning of Period 496,074 887,238 Cash and Cash Equivalents - End of Period $ 388,216 $ 334,229 ============= ============= Supplemental Cash Flow Information: Cash Paid for Interest $ -- $ -- ============= ============= Cash Paid for Income Taxes $ 29,985 $ 12,500 ============= =============
The accompanying notes are an integral part of the financial statements. 4 ARBOR ENTECH CORPORATION NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (Unaudited) NOTE 1 - Unaudited Interim Financial Statement In the opinion of the Company, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations and cash flows presented. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. NOTE 2 - Inventories Inventories consist of the following: Raw Materials $ 65,092 Finished Goods 32,060 ------------ $ 97,152 ============ NOTE 3 - Property, Plant and Equipment Property, plant and equipment consists of the following: Land $ 3,000 Building and Improvements 61,114 Machinery and Equipment 4,300 Computers 10,273 Automobiles and Trucks 39,780 ------------- 118,467 Less: Accumulated Depreciation 59,842 ------------- $ 58,625 ============= The land and building are collateralized by a mortgage held by the Company's Secretary/Treasurer (see Note 5). 5 ARBOR ENTECH CORPORATION NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (Unaudited) NOTE 4 - Notes Receivable - Related Parties Notes receivable from related parties consists of amounts due from affiliated companies. These loans originally had no specific repayment terms and are classified as a deduction from stockholders' equity. Although the loans bear interest such interest is not recorded as income for financial statement purposes but as additional contributed capital. In November 1999 the remaining two loans were memorialized into 10 year promissory notes bearing interest at 10% per annum. The notes consist of the following: Receivable from: Rushmore Financial Services, Inc. (a) $ 871,138 Double H Management Corp. (b) 216,747 ----------- 1,087,885 Accrued Interest 62,692 ----------- $ 1,150,577 =========== (a) A corporation wholly owned by Mr. Shefts and Mr. Houtkin. (b) A wholly owned subsidiary of Rushmore Financial Services, Inc. NOTE 5 - Commitments and Contingencies Line of Credit The Company has a revolving credit facility with its Secretary/Treasurer, secured by a mortgage of the Company's real property located in Tioga County, Pennsylvania. This revolving line of credit provides for the extension of credit in the aggregate principal amount of $100,000 with interest at 11% per annum. Principal and interest are payable on demand. There was no balance due at July 31, 2000, on this credit facility. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 The statements contained in this report which are not historical fact are "forward-looking statements" that involve various important assumptions, risks, uncertainties and other factors which could cause the Company's actual results for 2000 and beyond to differ materially from those expressed in such forward-looking statements. These important factors include, without limitation, competitive factors and pricing pressures, changes in legal and regulatory requirements, technological change or difficulties, product development risks, commercialization and trade difficulties and general economic conditions, as well as other risks previously disclosed in the Company's securities filings and press releases. General We are a wood products company which has been in business since 1980. Our business has increased over the years. We are almost wholly dependent on sales to Home Depot. Arbor also has traded securities for its own account but has discontinued such activity. Results of operations Quarter ended July 31, 2000, compared to the quarter ended July 31, 1999. Net sales for the quarter ended July 31, 2000, were approximately $93,000, a decrease of 40% as compared to net sales of approximately $154,000 for the quarter ended July 31, 1999. Net sales decreased due to less sales to Home Depot. Net losses from trading securities were approximately $111,000 for the quarter ended July 31, 1999. Arbor had no trading activities during the quarter ended July 31, 2000 and has discontinued its trading activities and does not intend to resume them. Cost of sales were approximately $47,000 for the quarter ended July 31, 2000, a decrease of approximately $28,000 or 37% over the comparable 1999 period cost of sales of approximately $75,000. This decrease is primarily attributable to Arbor's decline in sales. Selling, general and administrative expenses were approximately $95,000 for the quarter ended July 31, 2000, an increase of approximately $32,000 or 51% over the quarter ended July 31, 1999, selling, general and administrative expenses of approximately $63,000. This increase was due primarily to an increase in salaries and related 7 payroll tax expenses of approximately $21,000, and an overall increase in other general expenses of $11,000. Interest income for the quarters ended July 31, 2000 and 1999 was approximately $3,000. Interest expense was approximately $5,000 for the quarter ended July 31, 1999, compared with $0 for the quarter ended July 31, 2000. This decrease of $5,000 was due to the repayment by Arbor of its interest bearing loans. Arbor's net loss decreased from approximately $97,000 for the quarter ended July 31, 1999 to approximately $46,000 for the quarter ended July 31, 2000. This was a decrease of approximately $51,000, or 53%. The results of operations for the three months ended July 31, 2000, are not necessarily indicative of the results for any future interim or fiscal year period. Liquidity and Capital Resources In the periods discussed above, Arbor's working capital requirements have been met primarily from sales of its wood products. At July 31, 2000, we had working capital of approximately $458,000. As at July 31, 2000, we had cash and cash equivalents of approximately $388,000, which represented approximately 66% of total assets. Arbor believes it has adequate working capital and that its operations will generate cash adequate to fund its operations for at least the next 12 months. Net cash used by operating activities decreased by approximately $123,000 from the quarter ended July 31, 1999, to the quarter ended July 31, 2000. This decrease was partially due to the change in the purchase and sale of trading securities from the quarter ended July 31, 1999, to the quarter ended July 31, 2000. During the quarter ended July 31, 1999, Arbor had net purchases over sales proceeds of approximately $111,000 compared to $0 in the quarter ended July 31, 2000. Net cash used in investing activities was approximately $18,000 during the quarter ended July 31, 2000, which represented capital expenditures made by Arbor. Net cash used in financing activities was approximately $340,000 in the quarter ended July 31, 1999, compared to $0 in the quarter ended July 31, 2000. This change was primarily attributable to additional net loans made by Arbor to related parties during the quarter ended July 31, 1999. 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) None (b) None SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ARBOR ENTECH CORPORATION Registrant By: /s/ Harvey Houtkin ---------------------------- President By: /s/ Mark Shefts ---------------------------- Mark Shefts Chief Financial Officer Dated: September 14, 2000 9 EX-27 2 a2025594zex-27.txt EXHIBIT 27
5 3-MOS APR-30-2001 MAY-01-2000 JUL-31-2000 388,216 0 31,287 0 97,152 525,455 118,467 59,842 584,080 66,758 0 0 0 7,050 510,272 584,080 92,654 95,543 46,816 141,630 0 0 0 (46,087) 0 (46,087) 0 0 0 (46,087) (.01) 0
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