-----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, BfRUgoRb9iQbxzQfw0C5mESucnS7bREhtquAQr5EnqIU5vzxQ2avdrEH2U5wff2y uWsHlAUe2btpV05qu7pZKg== 0000950150-96-000429.txt : 19960515 0000950150-96-000429.hdr.sgml : 19960515 ACCESSION NUMBER: 0000950150-96-000429 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLLUTION RESEARCH & CONTROL CORP /CA/ CENTRAL INDEX KEY: 0000763950 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 952746949 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14266 FILM NUMBER: 96563417 BUSINESS ADDRESS: STREET 1: 506 PAULA AVENUE CITY: GLENDALE STATE: CA ZIP: 91201 BUSINESS PHONE: 8182477601 MAIL ADDRESS: STREET 1: 506 PAULA AVE CITY: GLENDALE STATE: CA ZIP: 91201 FORMER COMPANY: FORMER CONFORMED NAME: DASIBI ENVIRONMENTAL CORP DATE OF NAME CHANGE: 19900529 10QSB 1 FORM 10-QSB FOR PERIOD ENDED MARCH 31, 1996 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON 25, D.C. 20549 [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarterly Period Ended March 31, 1996 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 No. 0-14266 POLLUTION RESEARCH AND CONTROL CORP. (Exact name of registrant as specified in its charter) California (State of or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer I.D. No.) 95-2746949 506 Paula Ave. Glendale, California 91201 (Address of Principal Executive Offices) (818) 247-7601 (Registrant's Telephone Number, Including Area Code) Indicate by checkmark 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 such shorter period that the Registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes X No ___ The number of shares of Common Stock outstanding at May 13, 1996 is 7,199,562. 2 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. FORM 10-QSB FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1996 TABLE OF CONTENTS
Part I Financial Information Page Item 1. Financial Statements Consolidated Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . 6 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 8
3 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET ASSETS (UNAUDITED)
As of March 31, 1996 CURRENT ASSETS: Cash $ 327,291 Marketable securities 100,000 Accounts receivable trade, net 1,111,483 Inventory (Note 3) 1,620,656 Other current assets 16,856 -------- TOTAL CURRENT ASSETS 3,176,286 PROPERTY, AND LEASEHOLD IMPROVEMENTS, NET 156,750 OTHER ASSETS 5,913 -------- TOTAL ASSETS $3,338,949 ==========
See notes to the financial statements. 3 4 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. CONSOLIDATED BALANCE SHEET LIABILITIES AND SHAREHOLDERS' EQUITY (UNAUDITED)
AS OF MARCH 31, 1996 CURRENT LIABILITIES: Accounts payable, Trade $ 413,244 Note payable, bank 200,000 Accrued liabilities 175,514 Current portion of deferred rent 23,012 ----------- TOTAL CURRENT LIABILITIES 811,770 ----------- DEFERRED RENT (LESS CURRENT PORTION) 98,104 ----------- TOTAL LIABILITIES 909,874 SHAREHOLDERS' EQUITY: Preferred Stock, no par value; 20,000,000 shares authorized, no shares issued and outstanding Common Stock, no par value; 30,000,000 shares authorized, 7,199,562 issued and 5,591,763 outstanding Less notes receivable (86,857) Unrealized gain on marketable securities 100,000 Accumulated deficit (3,175,831) Total Shareholders' Equity 2,429,075 ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,338,949 ===========
See notes to the financial statements. 4 5 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE-MONTH PERIOD ENDED MARCH 31, ------------------------------- 1996 1995 ---- ---- Net revenues $ 1,629,046 $1,469,042 Cost of goods sold 929,056 872,350 ----------- ---------- Gross profit 699,990 596,692 ----------- ---------- Operating expenses: Selling, general and administrative expenses 403,614 407,127 Research and development 38,022 54,095 ----------- ---------- Total operating expenses 441,636 461,222 ----------- ---------- Income from operations 258,354 135,470 Interest expense (3,837) 0 Interest and other income 4,638 521 Net income $ 259,155 $ 135,991 =========== ========== Earnings per share: Net income $ .04 $ .01 =========== ========== Weighted average number of common and common equivalent shares 6,941,557 6,935,627 =========== ==========
See notes to the financial statements. 5 6 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE-MONTH PERIOD ENDED MARCH 31, --------------- 1996 1995 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 259,155 $ 135,991 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 8,004 24,200 Changes in operating assets and liabilities: Accounts receivable (723,118) 91,065 Inventories 0 (31,000) Other current assets (3,112) (1,083) Accounts payable (26,664) (55,558) Accrued liabilities (31,416) (147,668) Deferred rent (3,634) 20,589 --------- --------- Net cash (used for) provided by operating activities (520,785) 36,536 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and leasehold improvements (3,759) (10,000) Other assets 0 (29,917) --------- --------- Net cash used for investing activities (3,759) (39,917) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank borrowings 50,000 0 Proceeds from issuance of common stock 160,140 0 --------- --------- Net cash provided by (used for) financing activities 210,140 0 --------- --------- NET DECREASE IN CASH (314,404) (3,381) CASH AT BEGINNING OF PERIOD 641,695 464,821 --------- --------- CASH AT END OF PERIOD $ 327,291 $ 461,440 ========= =========
See notes to the financial statement 6 7 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION: The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to a fair presentation of the results of operations for the periods presented. Interim results are not necessarily indicative of results for a full year. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1995. 2. NET INCOME PER SHARE: For the three months ended March 31, 1995, fully diluted earnings per share have been omitted as the net aggregate effect is anti-dilative. For the three months ended March 31, 1996, fully diluted earnings per share has been omitted because the company has no common stock equivalents whose exercise price was less than the market price of the common stock for substantially all of three consecutive months. 3. INVENTORY:
Inventory consists of: 03/31/96 Raw Materials $ 824,702 Work-in-Process 298,265 Finished Goods 497,689 ------- $ 1,620,656 ===========
4. BANK DEBT: In February 1994, the Company entered into a credit agreement with a bank, which provides for borrowing up to $200,000 through June 1, 1996. Borrowing under this agreement bear interest at 7 8 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. 2% above the bank's prime rate and are collateralized by substantially all of the Company's assets. As of March 31, 1996, the Company has borrowed $200,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS GENERAL The Company designs, manufactures and markets automated continuous monitoring instruments used to detect and measure various types of air pollution through its wholly-owned subsidiary, Dasibi Environmental Corp. The Company currently derives essentially all of its revenue from sales of its instruments and their replacement parts. RESULTS OF OPERATIONS THREE-MONTH PERIOD ENDED MARCH 31, 1996 VS. THREE-MONTH PERIOD ENDED MARCH 31, 1995 Net revenues increased 11% from $1,469,042 during the three-month period ended March 31, 1995 to $1,629,046 during the three-month period ended March 31, 1996, primarily as a result of increased unit shipments in January and February due to improved demand for products. Cost of sales increased 6% from $872,350 during the three-month period ended March 31, 1996, to $929,056 during the three-month period ended March 31, 1996, primarily as a result of increased sales, discussed above. Gross margin increased slightly from 41% in the quarter ending March 31, 1995 to 43% in the quarter ending March 31, 1996. Selling, general and administrative expenses decreased from $407,127 in the quarter ended March 31, 1995 to $403,614 in the quarter ended March 31, 1996. In the first quarter of 1995 and 1996 the Company has no provision for income taxes due to the utilization of net operating loss carryforwards. As a result of the foregoing factors, net income increased from $135,991 during the three-month period ended March 31, 1995 to $259,155 during the three-month period ended March 31, 1996. LIQUIDITY AND CAPITAL RESOURCES. The Company has historically financed its growth and cash needs primarily through borrowings, and the public and private sales of its securities. In that regard, the Company realized $160,140 on March 29, 1996 from the exercise of outstanding warrants to purchase Common Stock. In February 1994, the Company entered into a credit agreement with a bank, which provides for borrowings up to $200,000 through June 1, 1996. As of March 31, 1996, the Company has borrowed the full $200,000 under the agreement. 8 9 Form 10-QSB May 13, 1996 POLLUTION RESEARCH AND CONTROL CORP. Working capital increased from $ 1,944,610 at December 31, 1996 to $2,354,516 at March 31, 1996. The Company has no material commitments for capital expenditures as of March 31, 1996. The Company believes it will be able to meet its current obligations with funds generated from its own operations. INFLATION The Company believes that inflation has not had a material impact on its business. SEASONALITY The Company does not believe that its business is seasonal. RISK FACTORS The Company's future operating results may be affected by a number of factors, including: uncertainties relative to global economic conditions; industry factors; the availability and cost of components; the Company's ability to develop, manufacture and sell its products profitably; the Company's ability to successfully increase its market share in its core business while expanding its product base into other markets; the strength of its distribution channels; and the Company's ability to effectively manage expense growth relative to revenue growth in anticipation of continued pressure on gross margins as a percentage of net sales. 9 10 Form 10-QSB POLLUTION RESEARCH AND CONTROL CORP. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Not applicable. (b) The Company did not file any Reports on Form 8-K during the period ended March 31, 1996. 10 11 Form 10-QSB POLLUTION RESEARCH AND CONTROL CORP. 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. POLLUTION RESEARCH AND CONTROL CORP. (Registrant) By: /s/ Albert E. Gosselin Jr. Albert E. Gosselin, Jr., President and Chief Executive Officer By: /s/ Cynthia L. Gosselin Cynthia L. Gosselin, Chief Financial Officer (Principal Accounting and Financial Officer) Dated: May 13, 1996 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 327 1 1,111 0 1,620 3,176 258 101 3,338 811 0 0 0 0 0 3,338 1,629 0 929 929 442 0 0 258 0 0 0 0 0 258 .04 .04
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