10QSB 1 rac-303q.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 2003. OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to ------------------ ------------------ Commission file number Ridgefield Acquisition Corp. ---------------------------- (Exact name of small business issuer as specified in its charter.) Colorado 0-16335 84-0922701 -------- ------- ---------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 10 South Street, Ste. 202, Ridgefield, CT 06877 (203) 894-9755 -------------- (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 the past 90 days. Yes X No ----- ----- As of May 12, 2003 the Registrant had outstanding 813,028 shares of common stock, par value $.10 Transitional Small Business Disclosure Format (check one): Yes No X ----- ----- RIDGEFIELD ACQUISITION CORP. (A Development Stage Company) FORM 10-QSB MARCH 31, 2003 Page PART I - FINANCIAL INFORMATION 3 Item 1. Financial Statements 3 Consolidated Balance Sheets as of December 31, 2002 and March 31, 2003 (unaudited) 3 Consolidated Statements of Operations for the Three Months Ended March 31, 2002 and 2003, Cumulative Amounts from January 1, 2000 through March 31, 2003 (unaudited) 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2002 and 2003, Cumulative Amounts from January 1, 2000 through March 31, 2003 (unaudited) 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Plan Of Operations 7 PART II - OTHER INFORMATION 11 Item 5. Other Information 11 Item 6. Exhibits & Reports on Form 8-K 11 SIGNATURES 12 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. RIDGEFIELD ACQUISITION CORP. (A Development Stage Company) CONSOLIDATED BALANCE SHEETS
December 31, March 31, 2003 2002 (Unaudited) ASSETS CURRENT ASSETS Cash $ 346,165 $ 324,011 ----------- ----------- Total Current Assets 346,165 324,011 ----------- ----------- $ 346,165 $ 324,011 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 22,482 $ 26,991 ----------- ----------- Total Current Liabilities 22,482 26,991 ----------- ----------- STOCKHOLDERS' EQUITY Preferred Stock, $.10 par value; authorized - 1,000,000 shares Issued - none Common Stock, $.10 par value; authorized - 5,000,000 shares Issued and outstanding - 813,028 shares 81,303 81,303 Capital in excess of par value 1,595,509 1,595,509 Accumulated (deficit) (947,820) (947,820) (Deficit) accumulated during the development stage (405,309) (431,972) ----------- ----------- 323,683 297,020 ----------- ----------- $ 346,165 $ 324,011 =========== ===========
See accompanying notes to consolidated financial statements. 3 RIDGEFIELD ACQUISITION CORP. (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS Cumulative Three Months Ended Amounts from March 31, January 1, 2000 to 2002 2003 March 31, 2003 REVENUES Interest income $ 1,579 $ 1,237 $ 22,836 --------- --------- --------- OPERATING EXPENSES General and administrative 22,610 27,899 305,459 Employee stock options 130,625 Patent write-off -- -- 18,724 --------- --------- --------- 22,610 27,899 454,808 --------- --------- --------- NET (LOSS) $ (21,031) $ (26,662) $(431,972) ========= ========= ========= NET (LOSS) PER COMMON SHARE $ (0.03) $ (0.03) $ (.57) ========= ========= ========= Basic and Diluted WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic and Diluted 813,023 813,028 762,752 ========= ========= ========= See accompanying notes to consolidated financial statements. 4 RIDGEFIELD ACQUISITION CORP. (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS
Cumulative Three Months Ended Amounts from March 31, January 1, 2000 to 2002 2003 March 31, 2003 CASH FLOWS FROM OPERATING ACTIVITES Net income (loss) $ (21,031) $ (26,662) $(431,972) Adjustment to reconcile net income (loss) to net cash provided (used) by operating activities Stock issuance for salary 11,000 -- 96,000 Stock issued for professional services -- -- 18,200 Stock options compensation -- -- 130,625 Write-off of patent -- -- 18,724 Changes in assets and liabilities (Increase) decrease in note and interest receivable (750) -- 50,000 Increase (decrease) in accounts payable and accrued expenses 4,610 4,508 11,597 --------- --------- --------- Net Cash (Used) by Operating Activities (6,171) (22,154) (106,826) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Net Cash (Used) in Investing Activities -- -- -- --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Exercise of common stock warrants -- -- 5,625 --------- --------- --------- Net Cash Provided by Financing Activities -- -- 5,625 --------- --------- --------- NET (DECREASE) IN CASH (6,171) (22,154) (101,201) CASH, BEGINNING OF PERIODS 341,611 346,165 425,212 --------- --------- --------- CASH, END OF PERIODS $ 335,440 $ 324,011 $ 324,011 ========= ========= =========
See accompanying notes to consolidated financial statements. 5 The unaudited financial statements included herein were prepared from the records of the Company in accordance with Generally Accepted Accounting Principles and reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 2002. The current interim period reported herein should be read in conjunction with the Company's Form 10-KSB subject to independent audit at the end of the year. The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION On January 14, 2003, in connection with its reinstatement as an active corporation in the State of Colorado, the Company changed its name from Bio-Medical Automation, Inc. to Ridgefield Acquisition Corp. On February 27, 2003, the Board of Directors of the Company authorized the formation of a Nevada corporation named Bio-Medical Automation, Inc. and authorized the management of the Company to transfer the Company's rights, title and interest in its patent to Bio-Medical Automation, Inc. On March 3, 2003, the Company filed Articles of Incorporation with the Secretary of State of the State of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly owned by the Company. The accompanying financials statements as of March 31, 2003 and for the three months then ended include the accounts of the company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The Company has accumulated a deficit since reentering the development stage, on January 1, 2000, of $431,972 through March 31, 2003. In 1999, the Company sold all of its assets relating to its historical line of business and in 2000 abandoned its research and development efforts on a micro-robotic device. As of March 31, 2003, the Company has no principal operations or revenue producing activities. The Company is now pursuing an acquisition strategy whereby it is seeking to arrange for a merger, acquisition or other business combination with a viable operating entity. NOTE 2 - RELATED PARTY TRANSACTIONS On March 21, 2003, the Board of Directors renewed the President's employment agreement through March 2004 with an annual salary of $48,000, and granted the President an option to purchase 150,000 shares of the Company's common stock at an exercise price of 110% of the closing market price as of the date of grant, for a period of five years. 6 Item 2. Management Discussion and Analysis and Plan of Operations The following discussion and analysis provides information which the Company's management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report, as well as the Company's Annual Report on Form 10-KSB for the year ended December 31, 2002. Background ----------- Ridgefield Acquisition Corp. ("RAC" or the "Company") was incorporated as a Colorado corporation on October 13, 1983 under the name OZO Diversified Automation, Inc. In March 1999, in connection with the sale of substantially all of the Company's assets the Company changed its name to Bio-Medical Automation, Inc. On April 1, 2002, the Company was administratively dissolved by the Colorado Secretary of State for failing to timely file its bi-annual registration with the Colorado Secretary of State. On January 14, 2003 the Company filed an Application for Reinstatement pursuant to Section 7-114-203 of the Colorado Revised Statutes. In connection with the reinstatement, and in accordance with Colorado corporate law, the Company changed its name from Bio-Medical Automation, Inc. to Ridgefield Acquisition Corp. The reinstatement and name change became effective on January 14, 2003 when the Application for Reinstatement was filed with the Colorado Secretary of State. Neither the administrative dissolution nor reinstatement and name change has had or will have any material effect on the holders of the securities of the Company. On March 9, 1999, the Company completed the sale of substantially all of its assets to JOT Automation, Inc. (the "JOT Transaction"). As a result of the JOT Transaction, the Company's historical business, the depaneling and routing business, is considered to be a "discontinued operation" and, consequently, provides no benefit to persons seeking to understand the Company's financial condition or results of operations. Following the JOT Transaction the Company devoted its efforts to the development of a prototype micro-robotic device (the "micro-robotic device") to manipulate organic tissues on an extremely small scale. Due to the inability to complete the micro-robotic device, the Company determined that it would cease the development of the micro-robotic device and, as of June 30, 2000, the capitalized costs related to the patent underlying the micro-robotic device have been written off by the Company. The Company has never derived any revenues from the micro-robotic device. Since July 2000 the Company has suspended all operations, except for necessary administrative matters relating to the timely filing of periodic reports as required by the Securities Exchange Act of 1934. Accordingly, during the years ended December 31, 2002 and December 31, 2001, the Company has earned no revenues from operations. 7 Acquisition Strategy -------------------- The Company's acquisition strategy is focused on seeking to arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company has not identified a viable operating entity for a merger, acquisition, business combination or other arrangement, and there can be no assurance that the Company will ever successfully arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company anticipates that the selection of a business opportunity will be a complex process and will involve a number of risks, because potentially available business opportunities may occur in many different industries and may be in various stages of development. Due in part to depressed economic conditions in a number of geographic areas, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity for all shareholders and other factors. In some cases, management of the Company will have the authority to effect acquisitions without submitting the proposal to the shareholders for their consideration. In some instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration, either voluntarily by the Board of Directors to seek the shareholders' advice and consent, or because of a requirement of state law to do so. In seeking to arrange a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, management's objective will be to obtain long-term capital appreciation for the Company's shareholders. There can be no assurance that the Company will be able to complete any merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity. 8 The Company Receives a U.S. Patent ---------------------------------- Following the sale of substantially all of the Company's assets in 1999, the Company devoted its efforts to the development of a prototype micro-robotic device (the "micro-robotic device") to manipulate organic tissues on an extremely small scale for microdissection. The Company filed a patent application in February 1998, to protect certain features of the system and method of the micro-robotic device. However, due to the inability of the Company to complete the micro-robotic device, the Company determined that it would cease development of the micro-robotic device and, as of June 30, 2000, the capitalized costs related to the patent underlying the micro-robotic device have been written off by the Company. On March 19, 2002, the Company was awarded United States Patent No. US 6,358,749 B1 for the "Automated System for Chromosome Microdissection and Medthod of Using Same" (the "Patent"). The Patent covers an automated system and method for microdissection of samples such as chromosomes or other biological material, and in particular, it relates to a robotic assisted microdissection system and method that significantly reduces the time and skill needed for cellular and sub-cellular dissections. Microdissection is defined as dissection under the microscope; specifically: dissection of cells and tissues by means of fine needles that are precisely manipulated by levers. The system and method covered by the Patent attempts to provide reliability and ease of operation thereby making microdissection widely available to laboratories. While the Company has never derived any revenues from the micro-robotic device, the Company plans to attempt to license or sell the technology covered by the Patent. There can be no assurances that the Company will be able to successfully market the technology covered by the Patent or that the Company will ever derive any revenues from the Patent or the technology covered by the Patent. During the first quarter of 2003, the Board of Directors of the Company authorized the formation of a wholly owned subsidiary of the Company for the purposes of owning, developing and exploiting Patent. On March 3, 2003 the Company filed Articles of Incorporation with the Secretary of State of the State of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly owned by the Company (the "Subsidiary"). A copy of the Articles of Incorporation of Bio-Medical Automation, Inc. a Nevada corporation are attached as an Exhibit to the Company's Current Report on Form 8-K filed on March 7, 2003 which is incorporated herein by reference. The Board of Directors of the Company has authorized management of the Company to transfer the Patent to the Subsidiary in exchange for 5,000,000 shares of the common stock of the Subsidiary. The Company plans to develop and exploit the Patent through the Subsidiary. There can be no assurances that the Subsidiary will be able to successfully develop and/or exploit the technology covered by the Patent. 9 Results of Operations --------------------- For the three months ended March 31, 2003, the Company has not earned any revenues, except for interest income of $1,237. For the same period the Company incurred general and administrative expenses of $27,899 resulting in a net loss from operations equal to $26,662. General and administrative expenditures were and have been directed to maintaining the Company's status as a public company, including (without limitation) filing reports with the Securities and Exchange Commission. Liquidity and Capital Resources ------------------------------- During three months ended March 31, 2003, the Company satisfied its working capital needs from cash on hand at the beginning of the quarter and cash generated from interest income during the quarter. As of March 31, 2003, the Company had on hand cash in the amount of $324,011. The Company's future financial condition will be subject to: (1) its ability to arrange for a merger, acquisition or a business combination with an operating business on favorable terms that will result in profitability, or (2) its ability to successfully develop and exploit the Patent. There can be no assurance that the Company will be able to do so or, if it is able to do so, that the transaction will be on favorable terms not resulting in an unreasonable amount of dilution to the Company's existing shareholders. The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity. The Company may need additional funds in order to develop and commercially exploit the Patent, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to develop and commercially exploit the Patent. Except for historical information contained herein, the statements in this report are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements when you see words such as "expect," "anticipate," "estimate," "may," "believe," and other similar expressions. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Actual results could differ materially from those projected in the forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially, from forecasted results. These and other risks are described elsewhere herein and in the Company's other filings with the Securities and Exchange Commission, namely the Company's Annual Report on Form 10-KSB for the year ended December 31, 2002. 10 PART II - OTHER INFORMATION Item 5. Other Information On March 24, 2001, the Company entered into an Employment Agreement with Steven N. Bronson, the President of the Company. The terms of such Employment Agreement include the following: Name Title Salary/Year Term ----------------------------------------------------------------- Steven N. Bronson CEO & President $48,000 1 year A copy of Mr. Bronson's Employment Agreement is attached as an Exhibit to the Company's Form 10-QSB for the quarter ended March 31, 2001 and is incorporated by reference. On March 21, 2003, the Board of Directors authorized the renewal of Mr. Bronson's employment agreement with the Company for another one (1) year term. Additionally, on March 21, 2003, the Company issued an option to Steven N. Bronson to purchase 150,000 shares of the Company's common stock at the purchase price of $1.65, which was 110% percent of the closing bid price on March 21, 2003 and such option is exercisable for a period of 5 years. Disclosure Controls and Procedures ---------------------------------- Under the supervision and with the participation of our management, including our principal executive officer, the Company has evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this annual report, and, based on their evaluation, our president has concluded that these controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of his evaluation. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure. Item 6. Exhibits and Reports on Form 8-K a) Exhibits 99.1 President's Written Certification Of Financial Statements Pursuant to 18 U.S.C. Statute 1350. b) On March 7, 2003, the Company filed a Current Report of Form 8-K disclosing the Company's name change and the formation of a wholly owned subsidiary Bio-Medical Automation, Inc., a Nevada corporation, which is incorporated herein by reference. 11 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. Dated: May 13, 2003 RIDGEFIELD ACQUSITION CORP. By: /s/ Steven N. Bronson ------------------------------------ Steven N. Bronson, President (Principle Executive Officer), as Registrant's duly authorized officer 12 Statement Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 By Principal Executive Officer and Principal Financial Officer Regarding Facts and Circumstances Relating to Exchange Act Filings I, Steven N. Bronson, certify that: 1. I have reviewed this quarterly report on Form 10-QSB for the period ended March 31, 2003; 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. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to me by others, 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 annual report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date; 5. I have disclosed, based on my most recent evaluation, to the registrant's auditors and the registrant's board of directors: 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. 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 my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 13, 2003. /s/ Steven N. Bronson ---------------------------------- Steven N. Bronson, President EXHIBIT INDEX The following Exhibits are filed herewith: Exhibit Number Description of Document ------ ----------------------- 99.1 President's Written Certification Of Financial Statements Pursuant to 18 U.S.C. Statute 1350.