-----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, EzsoRcf9FCUydacoU+vMD2tN8/OGc6eZvWZrfvjdOUmCsbk0M1D4f/VL7HFWD5aU G6wDUbi0Mi2MaqZsHYoNPw== 0001011438-04-000311.txt : 20040923 0001011438-04-000311.hdr.sgml : 20040923 20040923110104 ACCESSION NUMBER: 0001011438-04-000311 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040923 DATE AS OF CHANGE: 20040923 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL DETECTION TECHNOLOGY 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09327 FILM NUMBER: 041042143 BUSINESS ADDRESS: STREET 1: 9300 WILSHIRE BOULEVARD, SUITE 308 CITY: BEVERLY HILLS STATE: CA ZIP: 90212 BUSINESS PHONE: 3102483655 MAIL ADDRESS: STREET 1: 9300 WILSHIRE BOULEVARD, SUITE 308 CITY: BEVERLY HILLS STATE: CA ZIP: 90212 FORMER COMPANY: FORMER CONFORMED NAME: POLLUTION RESEARCH & CONTROL CORP /CA/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DASIBI ENVIRONMENTAL CORP DATE OF NAME CHANGE: 19900529 10QSB/A 1 form_10-qsba.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A (AMENDMENT NO. 1) [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2004 [ ] 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 0-14266 UNIVERSAL DETECTION TECHNOLOGY (Exact Name of Small Business Issuer as Specified in its Charter) CALIFORNIA 95-2746949 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 9595 WILSHIRE BOULEVARD, SUITE 700 BEVERLY HILLS, CALIFORNIA 90212 (Address of Principal Executive Offices) (310) 248-3655 (Issuer's Telephone Number, Including Area Code) 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 past 90 days. Yes X No __ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, no par value, 39,750,632 shares issued and outstanding as of May 13, 2004. Transitional Small Business Disclosure Format (check one): Yes X No __
UNIVERSAL DETECTION TECHNOLOGY INDEX PAGE PART I FINANCIAL INFORMATION........................................................3 Item 1. Financial Statements.........................................................3 Consolidated Balance Sheet as of March 31, 2004 (unaudited)..................3 Consolidated Statements of Operations for the three months ended March 31, 2004 and March 31, 2003 (unaudited)..........................4 Consolidated Statement of Changes in Stockholders' (Deficit) Equity for the three months ended March 31, 2004 (unaudited)............5 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and March 31, 2003 (unaudited).....................6 Notes to Consolidated Financial Statements...................................7 PART II OTHER INFORMATION...........................................................21 Item 6. Exhibits and Reports on Form 8-K............................................22
2 PURPOSE OF THIS AMENDMENT NO. 1. This Amendment No. 1 to our Form 10-QSB for the quarter ended March 31, 2004, is being filed to reflect a change that was made to our retained earnings and accrued expenses to correct a legal judgment recorded during the year ended December 31, 2002. We originally recorded the amount of damages sought by the plaintiff, rather than the amount of the final judgment. We have retroactively restated net loss for the year ended December 31, 2002, increasing the net loss from $1,980,718 to $2,143,218 due to an adjustment of $162,500. Accordingly, the March 31, 2004 financial statements have been restated in this Amendment No. 1 and an adjustment has been made to retained earnings and accrued expenses as of March 31, 2004 to correct the error. This Amendment No. 1 does not reflect events occurring after the filing of the original Form 10-QSB, or modify or update the disclosures therein in any way other than as required to reflect the amendment set forth below. PART I FINANCIAL INFORMATION UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES (FORMERLY POLLUTION RESEARCH AND CONTROL CORP.) INDEX TO FINANCIAL STATEMENTS
PAGE Unaudited Consolidated Balance Sheet 2 Unaudited Consolidated Statements of Operations 3 Unaudited Consolidated Statements of Changes in Stockholders' Equity (Deficit) 4 Unaudited Consolidated Statements of Cash Flows 5 Notes to Unaudited Consolidated Financial Statements 6
3 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEET MARCH 31, 2004 (RESTATED)
ASSETS CURRENT ASSETS: Cash $ 186,686 Restricted cash 100,605 Due from related party 46,980 Inventories 20,000 Prepaid expenses 639,239 -------------- Total Current Assets 993,510 EQUIPMENT, NET 53,099 -------------- $ 1,046,609 ============== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable, trade $ 152,653 Accrued liabilities 866,500 Notes payable, related party 40,000 Notes payable 1,257,526 Accrued interest expense 484,471 -------------- Total current liabilities 2,801,150 -------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT): Preferred stock, $.01 par value, 20,000,000 shares --- Authorized, -0- issued and outstanding Common stock, no par value, 480,000,000 shares Authorized, 38,814,922 issued and outstanding 17,221,632 Additional paid-in-capital 3,606,891 Accumulated (deficit) (22,583,064) -------------- Total stockholders' equity (deficit) (1,754,541) -------------- $ 1,046,609 ============== See accompanying notes to unaudited consolidated financial statements. 4 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 2003 --------------- -------------- REVENUE $ --- $ --- COST OF GOODS SOLD --- --- --------------- -------------- GROSS PROFIT --- --- --------------- -------------- OPERATING EXPENSES: Selling, general and administrative 654,253 99,914 Marketing 806,211 --- --------------- -------------- Total expenses 1,460,464 99,914 --------------- -------------- (LOSS) FROM OPERATIONS (1,460,464) (99,914) OTHER INCOME (EXPENSE): Interest income 1,097 48 Interest expense (42,363) (49,783) Amortization of loan fees (43,260) (30,000) --------------- -------------- Net other income (expense) (84,526) (79,735) --------------- -------------- NET (LOSS) $ (1,544,990) $ (179,649) =============== ============== NET (LOSS) PER SHARE - BASIC AND DILUTED $ (0.04) $ (0.01) =============== ============== WEIGHTED AVERAGE SHARES - BASIC AND DILUTED 37,375,750 12,657,459 =============== ============== See accompanying notes to unaudited consolidated financial statements.
5 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR THE THREE MONTHS ENDED MARCH 31, 2004
Total Common Stock Additional Accumulated Stockholders' Equity Shares Amount Paid-in-Capital (Deficit) (Deficit) ------------- ------------- ----------------- -------------- ---------------- BALANCE, DECEMBER 31, 2003 (RESTATED) 35,002,197 $ 15,705,055 $ 3,606,891 $ (21,038,074) $ (1,726,128) Stock issued in private placements net of offering costs of $181,098 3,812,725 1,516,577 --- --- 1,516,577 Net (loss) for the period --- --- --- (1,544,990) (1,544,990) ------------- ------------- ----------------- -------------- ---------------- BALANCE, MARCH 31, 2004 38,814,922 $ 17,221,632 $ 3,606,891 $ (22,583,064) $ (1,754,541) ============= ============= ================= ============== ================ See accompanying notes to unaudited consolidated financial statements.
6 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 2003 ---------------- --------------- CASH FLOWS FROM (TO) OPERATING ACTIVITIES: Net (loss) (1,544,990) (179,649) Adjustments to reconcile net (loss) to net cash (used in) operations: Stock issued for services --- 11,280 Fair market value of repriced warrants --- 30,000 Depreciation 1,165 --- Changes in operating assets and liabilities: Prepaid expenses 405,916 (10,938) Accounts payable and accrued expenses 72,129 (59,452) ---------------- --------------- Net cash (used in) operating activities (1,065,780) (208,759) ---------------- --------------- CASH FLOWS FROM (TO) INVESTING ACTIVITIES: Purchase of equipment (50,757) --- Payment s received on bridge note to related party 50,000 --- Advances to related party (17,881) --- (Increase) in restricted cash (372) --- ---------------- --------------- Net cash (used in) investing activities (19,010) --- ---------------- --------------- CASH FLOWS FROM (TO) FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,697,675 195,131 Payment of offering costs (181,098) (19,491) Proceeds from exercise of warrants --- 36,000 Payments on notes payable (260,000) --- ---------------- --------------- Net cash provided by financing activities 1,256,577 211,640 ---------------- --------------- NET INCREASE IN CASH 171,787 2,881 CASH, BEGINNING OF PERIOD 14,899 9,318 ---------------- --------------- CASH, END OF PERIOD 186,686 $ 12,199 ================ ===============
See accompanying notes to unaudited consolidated financial statements. 7 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2004 NOTE 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Item 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited consolidated financial statements reflect all adjustments that, in the opinion of management, are considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The accompanying financial statements should be read in conjunction with the audited consolidated financial statements of Universal Detection Technology, formerly Pollution Research and Control Corp., included in Form 10-KSB/A for the fiscal year ended December 31, 2003. On August 8, 2003, the shareholders approved the change of the name of Pollution Research and Control Corp. to Universal Detection Technology. PRIOR PERIOD RESTATEMENT During the quarter ended June 30, 2004, a change was made to the retained earnings and accrued expenses of the Company to correct the legal judgment recorded during the year ended December 31, 2002. The Company originally recorded the amount of damages sought by the plaintiff, rather than the amount of the final judgment. The Company has retroactively restated net loss for the year ended December 31, 2002, increasing the net loss from $1,980,718 to $2,143,218 due to an adjustment of $162,500. (See Note 5.) NOTE 2. EARNINGS PER COMMON SHARE The Company computes earnings per common share in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128). The Statement requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. The computation of diluted loss per share is similar to the basic loss per share computation except the denominator is increased to include the number of additional shares that would have been outstanding if the dilutive potential common shares had been issued. In addition, the numerator is adjusted for any changes in income or loss that would result from the assumed conversions of those potential shares. However, such presentation is not required if the effect is antidilutive. Accordingly, the diluted per share amounts do not reflect the impact of warrants and options or convertible debt outstanding for 11,772,657 and 9,443,989 shares March 31, 2004 and 2003, respectively, because the effect of each is antidilutive. NOTE 3. STOCKHOLDERS' EQUITY During the three months ended March 31, 2004, the Company sold 3,812,725 shares of common stock for a total of $1,697,675. The Company paid placement fees totaling $181,098 which includes $96,184 in placement fees to Astor Capital ("Astor"), a company in which its President and CEO has a 50% equity interest and is a co-founder and managing partner, and $84,914 in placement fees to an unrelated entity. Certain investors received warrants to purchase 166,668 shares of the Company's common stock at $0.90 per share in connection with the sale of stock. 8 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 NOTE 4. RELATED PARTY TRANSACTIONS Effective June 1, 2003, the Company entered into an agreement with Astor that requires the Company to pay $25,000 per month for investment banking and strategic advisory services as well as a 10% fee for all debt and equity financing raised by the Company. For the three months ended March 31, 2004, the Company paid a total of $171,184 under this agreement. Restricted cash consists of a certificate of deposit, which guarantees an irrevocable letter of credit. The letter of credit has been provided for the benefit of Astor. The Company and Astor intend to enter into a sub-lease agreement during 2004. The Company's restricted cash currently guaranteeing its letter of credit for the benefit of Astor will be incorporated as a condition of the sub-lease agreement when executed. The amounts currently due from Astor will be applied to a lease deposit when the sub-lease is executed. NOTE 5. PRIOR PERIOD ADJUSTMENT The Company leased its facilities under a long-term non-cancelable operating lease. The Company assigned the lease to Dasibi in March 2002. The Company was named in a lawsuit to collect past due rent. In November 2002, a judgment was entered against the Company for a total of $411,500, which has been accrued. During the quarter ended June 30, 2004, a change was made to the retained earnings and accrued expenses of the Company to correct the legal judgment recorded during the year ended December 31, 2002. The Company originally recorded the amount of damages sought by the plaintiff, rather than the amount of the final judgment. The Company has retroactively restated net loss for the year ended December 31, 2002, increasing the net loss from $1,980,718 to $2,143,218 due to an adjustment of $162,500. NOTE 6. SUBSEQUENT EVENTS Subsequent to March 31, 2004, the Company issued 93,200 shares of its common stock for proceeds of $59,560. The Company paid related placement fees of $2,547 to Astor. On April 29, 2004, the Company commenced a private placement, offering for sale a minimum of $250,000 of Units on a "best efforts all or none" basis and an additional of $750,000 of Units on a "best efforts" basis. Upon mutual agreement between the Company and the placement agent, the Company may offer an additional $2,000,000 of Units. Each Unit will consist of one share of common stock and a Class A Warrant and a Class B Warrant, each exercisable by the holder to purchase one-half share of the Company's common stock. Pursuant to the agreement with the placement agent, if the Company consummates an initial closing of the private placement offering, the Company will amend the terms of its agreement for investment banking and strategic advisory services, reducing the monthly payment to a sum no greater than $5,000 per month commencing April 29, 2004 and the nine months thereafter. In addition, the Company has agreed to defer payment of all accrued wages and future compensation due to its President and Chief Executive Officer in excess of $150,000 per year for nine months from April 29, 2004. 9 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. 31.1 Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Dated September 17, 2004. 32.1 Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Dated September 17, 2004. (b) Reports on Form 8-K. None. 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNIVERSAL DETECTION TECHNOLOGY Date: September 17, 2004 /s/ Jacques Tizabi -------------------------------------------- By: Jacques Tizabi Its: President, Chief Executive Officer and Chairman of the Board 11 EX-31 2 exhibit_31-1.txt Exhibit 31.1 Certification of Chief Executive Officer and Acting Chief Financial Officer of Universal Detection Technology I, Jacques Tizabi, certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB/A of Universal Detection Technology; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 17, 2004 /s/ Jacques Tizabi - -------------------------------------------- By: Jacques Tizabi Title: Chief Executive Officer and Acting Chief Financial Officer EX-32 3 exhibit_32-1.txt Exhibit 32.1 Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies the Quarterly Report on Form 10-QSB/A (the "Form 10-QSB/A") for the quarter ended March 31, 2004 of Universal Detection Technology (the "Issuer"). I, Jacques Tizabi, the Chief Executive Officer and Acting Chief Financial Officer of Issuer certify that, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge: (i) the Form 10-QSB/A fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and (ii) the information contained in the Form 10-QSB/A fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: September 17, 2004 /s/ Jacques Tizabi --------------------------------- Name: Jacques Tizabi -----END PRIVACY-ENHANCED MESSAGE-----