-----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, DjafZP/wGjj4IAvvVF5LPtGNbtGsYDRHC30ztDwkHKacGYIOdS6O0pXrh3ntkHJ6 h2QzjjnMdThucWl66LKVwg== /in/edgar/work/0001108017-00-000091/0001108017-00-000091.txt : 20001117 0001108017-00-000091.hdr.sgml : 20001117 ACCESSION NUMBER: 0001108017-00-000091 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000831 FILED AS OF DATE: 20001116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELITE TECHNOLOGIES INC /TX/ CENTRAL INDEX KEY: 0000835909 STANDARD INDUSTRIAL CLASSIFICATION: [6770 ] IRS NUMBER: 760252296 STATE OF INCORPORATION: TX FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17597 FILM NUMBER: 771138 BUSINESS ADDRESS: STREET 1: 6991 PEACHTREE INDUSTRIAL BLVD STREET 2: SUITE 350 CITY: NORCROSS STATE: GA ZIP: 30092 BUSINESS PHONE: 7703818089 MAIL ADDRESS: STREET 1: 700 CRESTWOOD PARKWAY STREET 2: SUITE 1000 CITY: DULUTH STATE: GA ZIP: 30096 FORMER COMPANY: FORMER CONFORMED NAME: CONCAP INC DATE OF NAME CHANGE: 19990826 FORMER COMPANY: FORMER CONFORMED NAME: ELITE TECHNOLOGIES INC/TX DATE OF NAME CHANGE: 19990825 FORMER COMPANY: FORMER CONFORMED NAME: CONTINENTAL CAPITAL RESOURCES INC DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt - ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |X| For the Quarterly Period ended August 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: 0-17597 ELITE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) 76-0252296 Texas (IRS Employer Identification (State or other Jurisdiction of No.) incorporation or organization) 30096 6991 Peachtree Industrial Blvd. (Zip Code) Suite 320 Norcross Georgia (Address of principal executive offices) 678-969-9146 (Registrant's telephone number, including area code) 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 | | No |X| The number of issued and outstanding shares of the issuer's class of capital stock as of May 31, 2000, the latest practicable date, is as follows: 34,275,720 shares of Common Stock $.0001 par value. - --------------------------------------------------------------------------------
INDEX PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet as of August 31, 2000 (unaudited) 3 And May 31, 2000 (Audited) Consolidated Statements of Operations for the Three Month Period ended August 31, 2000 (unaudited) And Period ended August 31, 1999 (unaudited) 4 Consolidated Statements of Cash Flows for the Three Month Period ended August 31, 2000 (unaudited) And Period ended August 31, 1999 (unaudited) 5-6 Notes to Consolidated Financial Statements (unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations 8-10 PART II - OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults upon Senior Securities 10 Item 4. Submission of matters to Vote of Security Holders 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 Addendum to Purchase Agreement Exhibit Index 11 Signature 12
PART IItem I ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Balance Sheet August 31, 2000 and May 31, 2000 (Unaudited) 8/31/2000 5/31/2000 ssets Current assets: Cash and cash equivalents $ 226,525 $ -- Accounts receivable, less allowance for doubtful 1,036,924 -- Notes receivable on convertible debt obligation -- 527,470 Note receivable from officers 573,703 289,084 Other current assets 685,099 30,000 ----------------- ----------------- ----------------- ----------------- 2,522,251 846,554 Property and equipment, net 218,229 31,004 Excess of cost over net assets of businesses acquired, less accumulated amortization 5,678,359 2,609,609 Other assets 53,789 6,789 ----------------- ----------------- ----------------- ----------------- $ 8,472,628 $ 3,493,956 ================= ================= ================= ================= Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 2,490,010 $ 523,541 Cash overdrafts -- 35,106 Accrued expenses 29,292 114,292 Federal payroll taxes payable 931,888 931,888 State payroll taxes payable 321,614 321,614 Current installments of notes payable 390,899 112,895 ----------------- ----------------- ----------------- ----------------- 4,163,703 2,039,336 ----------------- ----------------- ----------------- ----------------- Long-term liabilities: Notes payable 178,995 100,000 Convertible note 1,035,599 1,035,599 ----------------- ----------------- ----------------- ----------------- 1,214,594 1,135,599 ----------------- ----------------- ----------------- ----------------- Contingencies Stockholders' equity: Common stock, $.0001 par value; 500,000,000 shares authorized; 34,275,720 4,148 3,427 Additional paid in capital 14,019,401 8,479,400 Retained earnings (10,929,218) (8,163,806) ----------------- ----------------- ----------------- ----------------- 3,094,331 319,021 ----------------- ----------------- ----------------- ----------------- $ 8,472,628 $ 3,493,956 ================= =================
See Accompanying notes to consolidated Financial Statements
ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the Three Months Ended August 31, 2000 and 1999 (Unaudited) 2000 1999 ---- ---- Revenues $ 3,630,818 $ 377,997 Less: cost of goods sold 2,968,113 -------------------- ------------------------ -------------------- ------------------------ Gross income 662,705 377,997 Salaries, wages and benefits 328,101 385,545 Depreciation and amortization 115,625 -- Other operating expenses 507,268 266,132 -------------------- ------------------------ -------------------- ------------------------ Operating loss (288,289) (273,680) Investment banking fees 2,465,500 -- Other expenses, net 1,713 -- -------------------- ------------------------ -------------------- ------------------------ Loss before income taxes (2,755,502) (273,680) Income taxes -- -- -------------------- ------------------------ -------------------- ------------------------ Net loss $ (2,755,502) $ (273,680) ==================== ======================== ==================== ======================== Weighted average shares basic 37,880,720 ==================== ==================== Basic loss per share $ (0.07) $ ==================== ==================== Adjusted weighted average shares - diluted 37,880,720 ==================== ==================== Diluted loss per share $ (0.07) $ ==================== ====================
See accompanying notes to consolidated financial statements
ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Three Months Ended August 31, 2000 and 1999 (Unaudited) 2000 1999 ---- ---- Cash flows from operating activities: Net loss $ (2,755,502) $ (273,680) Adjustments to reconcile net loss to net to cash used in operating activities: Depreciation and amortization 68,750 -- Commitment to issue stock for investment banking services 2,465,500 -- Decrease (increase) in: Accounts (1,036,924) 85,981 receivable Inventory (586,848) -- Other assets (115,251) -- Increase (decrease) in: Accounts payable 1,966,469 227,400 Federal payroll taxes payable -- 125,048 State payroll taxes payable -- 20,420 Accrued expenses and other current (60,000) 1,943 liabilities ----------------- ----------------- ----------------- ----------------- Net cash used in operating (53,806) 187,112 activities ----------------- ----------------- ----------------- ----------------- Cash flows from investing activities: Acquisition of businesses (187,225) (67,191) Notes receivable from officers (284,619) -- ----------------- ----------------- ----------------- ----------------- Net cash used in investing (471,844) (67,191) activities ----------------- ----------------- ----------------- ----------------- Cash flows from financing activities: Proceeds from issuance of common stock 500,000 -- Other capital contributions 287,281 -- Increase (decrease) in cash overdrafts (35,106) -- ----------------- ----------------- Net cash provided by financing activities 752,175 0 ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in cash and cash equivalents 226,525 119,921 Cash and cash equivalents at beginning of year -- 0 ----------------- ----------------- ----------------- ----------------- Cash and cash equivalents at end of year $ 226,525 $ 119,921 ================= =================
ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years Ended May 31, 2000, 1999 and 1998 2000 Supplemental disclosures of cash flow information cash paid during the year for: Interest $ 29,292 ================= ================= Income taxes $ -- ================= ================= Acquisition of businesses: Fair value of assets acquired, including goodwill $ 1,266,215 Fair value of liabilities assumed (16,215) Promissory note issued Fair value of common stock issued (1,000,000) ----------------- ----------------- Net cash paid for acquisitions $ 250,000 =================
ELITE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AUGUST 31, 2000(UNAUDITED) Recognition and Revenue Expense Web site development and consulting services are generally performed on a time and materials basis and are recognized as the services are performed. All other revenue and expense is accrued as incurred. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Property and Equipment Property and equipment are carried at cost. Expenditures for maintenance and repairs that do not significantly extend the useful lives of the assets are expensed as incurred, while major replacements and betterments are capitalized. Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets, generally five years for computer equipment and furniture and fixtures, and three to five years for purchased software. Cost of property sold or otherwise disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income currently. Excess of Cost Over Net Assets of Business Acquired The excess of cost over net assets of businesses acquired (goodwill) is being amortized using the straight-line method over five years. The amortization period is based on, among other things, the nature of the products and markets, the competitive position of the acquired companies, and the adaptability of changing market conditions of the acquired companies. At each balance sheet date, the Company assesses the recoverability of this intangible asset by determining whether the amortization of the goodwill balance over its remaining life can be recovered through undiscounted future operating cash flows of the acquired operation. The amount of goodwill impairment, if any, is measured based on projected discounted future operating cash flows using a discount rate equal to the rate of return that would be required by the Company for a similar investment with like risks. The assessment of the recoverability of goodwill will be impacted if estimated future operating cash flows are not achieved. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Payroll Taxes Payable Payroll Taxes payable includes a liability, the assumption of which was part of the agreement to acquire Intuitive Technology Consultants, Inc. Management believes it can continue to reduce the liability accordingly without adversely affecting the continuing operations of the company. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Financial Statements and Notes thereto included elsewhere in this filing. Certain statements made in this "Management's Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements. The forward-looking statements contained herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. This Quarterly Report may contain various forward-looking statements that are based on management's belief as well as assumptions made by management based on information currently available to management. In some cases, you can identify forward-looking statements by the use of certain terminology, such as "may," "will," "should," "would," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of such terms or other comparable terminology. Any expectations based on these forward-looking statements are subject to risks and uncertainties. These risks and uncertainties could affect the Company's future financial and operating results and cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by or on behalf of the Company. Overview ORGANIZATION Elite Technologies, Inc. (referred to herein as "Elite" or the "Company")is a full service technology company offering information technology ("IT")services to small, medium and large enterprises. IT services involve the facilitation of the flow of information within a company or between a company and external sources. These services typically involve computer hardware, software and "integration" efforts to allow diverse systems to communicate with one another. Elite was founded as a Georgia corporation in 1996 under the name Intuitive Technology Consultants, Inc. ("ITC"). In July, 1998, ITC Acquisition Group, LLP, consisting of management of ITC, acquired a majority interest, through a reverse merger, in CONCAP, Inc.. On April 22, 1999, the Company changed its name to Elite Technologies, Inc. The Company's charter was revoked on February 11, 2000 for the failure to file franchise tax returns in the State of Texas, however the Company is presently seeking to reinstate its charter. Although Elite, through its divisions offered a variety of services in fiscal 2000, Elite has suspended most of its operations following the acquisition of Ace Manufacturing Group, Ltd. ("AMG") in April 2000. Elite intends to acquire other companies to fulfill the services of its divisions. As part of Elite's acquisition strategy, the Company has entered into an agreement to acquire substantially all of the capital stock of AC Travel, Inc. and International Electronic Technologies of Georgia, Inc ("IET"). Elite does not presently have any other definitive agreements to acquire additional companies and there can be no assurance that it will do so. The Company's principal executive offices are located at 6991 Peachtree Industrial Blvd., Suite 320, Norcross, GA 30092 Telephone: (678) 969-9146. The Company's Internet address is www.elitetech-usa.com. RECENT DEVELOPMENTS In June 2000, Elite signed purchase agreements with AC Travel, Inc. and International Electronic Technologies of Georgia ("IET"). AC Travel, a wholesale and retail travel agency, including a website catering to the international business traveler who is traveling abroad in the U.S., The purchase price for all the capital stock of AC Travel is 1,500,000 shares of common stock, and $300,000. IET provides wholesale and retail sales and distribution of computer related products. The purchase price for IET is 1,200,000 shares of common stock and $300,000. Elite's objective is to establish itself as a leading provider of internet connectivity and content solutions. The company intends to utilize acquisitions to support the growth of AMG's business, such as content and hardware providers. The Company intends to utilize AMG's content and advertising platform to serve as a means by which retailers and other connectivity solutions providers can access a viewer base with quantifiable online purchasing habits. The company was default of certain terms of the original purchase agreements by failing to tender certain cash payments due under the said purchase agreements. The Company has since re-negotiated the terms of the pay out of the amounts owed under the purchase agreements, and management believes it will be able to meet those obligations without condition. All acquisitions have been accounted for as purchases in this filing and are reflected as such on the Consolidated Financial Statements. This does not take into account the year to date financial information of these acquisitions, but only provides for results of operations since the date of acquisition of the individual companies. RESULTS OF OPERATIONS QUARTER ENDED AUGUST 31, 2000 COMPARED WITH QUARTER ENDED AUGUST 31, 1999 Revenues. Revenues from operations for First Quarter 2000 increased by 860.54% from the same period, 1999. The increase in revenues is primarily attributable to revenues in the amount of approximately $3,500,000 attributable to the acquisition of the all the capital stock of IET in June, 2000 and AC Travel in June, 2000. Net Revenue. Net Revenue was $662, 705 for the three months ended August 31, 2000, 18.2% as a percentage of revenue as compared to net revenue of $377,997 for the three months ended August 31, 1999. The Company believes that the increase in net revenue is primarily attributable to the acquisition of IET and AC Travel. Salaries, Wages and Benefits. Salaries, Wages and Benefits decreased - -14.90% from 1999. The decrease is due to (i) terminations of staff related to the restructuring of the company. Other Operating Expenses. Other Operating Expenses increased by 90.61% to $507,268 attributed to the restructuring of the business and the acquisition of AC Travel and IET. Stock Based Compensation. The company issued approximately 1.5 million shares of unregistered common stock in connection with investment banking services and investor relations resulting in a stock based compensation valuation of approximately 2.4 million dollars. Operating Loss. Operating losses increased to $288,289 from $ 273,680 representing a 5.34% increase in the loss due to increased operational costs attributed to the acquisition(s) completed by Elite. Loss Before Income Taxes (Net Loss). Net Loss increased 906.83% due to the investment banking compensation paid as stock based compensation. LIQUIDITY AND CAPITAL RESOURCES The Company's capital requirements have principally related to the acquisition of businesses, working capital needs and capital expenditures for growth. These requirements have been met through a combination of private placements and internally generated funds. Although the Company incurred direct costs for acquisitions, the Company completed these acquisitions primarily in stock for stock transactions. The Company currently lacks the working capital required to continue as a going concern and to achieve its acquisition program and internal growth objectives. Management expects to enter into agreements for debt or equity funding in the first or second quarter of fiscal year 2001 in order to meet the needs of internal growth and acquisitions. Management believes that such agreements for debt or equity funding will be sufficient to enable the Company to continue operating as a going concern. However, there is no assurance that agreement for such additional funding will be consummated. The independent auditor's report on our financial statements contains explanatory language that substantially exists about our ability to continue as a going concern. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is, from time to time, a party to routine litigation incidental to operating a business, including claims of discrimination, wrongful termination, and other similar claims. ITEM 2. CHANGES IN SECURITIES. The company issued unregistered stock for investment banking services valued at $2,465,500. Additionally, the company issued securities in exchange for $500,000. The securities were issued under Regulation D, Rule (506). The remaining balance was for services rendered to the company by investment bankers. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. NONE ITEM 5. OTHER INFORMATION. During the First Quarter, the company attempted to appointed a CFO. However, due to disagreements, the relationship was terminated in the same period, and no further obligation exists between the parties. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 1. Addendum to IET Acquisition Agreement ADDENDUM TO STOCK PURCHASE AGREEMENT MADE AS OF JUNE 27, 2000, BETWEEN ELITE TECHNOLOGIES, INC., BUYER, AND INTERNATIONAL ELECTRONIC TECHNOLOGY OF GEORGIA, INC., D/B/A STARTEK COMPUTERS, and FRANK NOORI, INDIVIDUALLY, SELLER(S) ADDENDUM TO STOCK PURCHASE AGREEMENT THIS ADDENDUM TO STOCK PURCHASE AGREEMENT ["Third Addendum"], made on this 10th day of November, 2000, by and among Elite Technologies, Inc., a Texas corporation ["Buyer"], International Electronic Technology of Georgia, Inc., d/b/a Startek Computers, a Georgia corporation, and Frank Noori, individually [individually and collectively hereinafter referred to as "Seller"], W I T N E S S E T H: WHEREAS, on June 27, 2000, Buyer (as "Buyer" therein) and Seller (as "Seller" therein) entered into that certain "Stock Purchase Agreement Made as of June 27, 2000, Between Elite Technologies, Inc., Buyer, and International Electronic Technology of Georgia, Inc., d/b/a Startek Computers, and Frank Noori, Individually, Seller(s)" ["the Stock Purchase Agreement"] and that certain "Addendum to Stock Purchase Agreement Made as of June 27, 2000, Between Elite Technologies, Inc., Buyer, and International Electronic Technology of Georgia, Inc., d/b/a Startek Computers, and Frank Noori, Individually, Seller(s)" ["the Addendum"]; WHEREAS, on August 10, 2000, Buyer (as "Buyer" therein) and Seller (as "Seller" therein) entered into that certain "Addendum to Stock Purchase Agreement Made as of June 27, 2000, Between Elite Technologies, Inc., Buyer, and International Electronic Technology of Georgia, Inc., d/b/a Startek Computers, and Frank Noori, Individually, Seller(s)"; and WHEREAS, as of the time and date of execution of this Third Addendum, the buyer has failed to deliver a cash payment of $300,000 to Seller(s): NOW, THEREFORE, be it resolved, that the parties hereto, intending to be legally bound, do covenant and agree as follows: 1. Definitions. For the purposes of this Addendum, all terms shall have ----------- the same meanings ascribed thereto as in the Stock Purchase Agreement, unless a different agreement is specifically referred to. 2. Consummation. In order to consummate the stock purchase and sale as ------------ contemplated in the agreements and addenda referred to above, the parties hereto do undertake and agree to carry out the following duties and obligations: a. Buyer shall cause the sum of Three Hundred Thousand and No/100 U.S. Dollars (US$300,000.00), in certified funds (the "Funds"), to be paid to Seller not later than 6:00 PM, Eastern Standard Time, on Thursday, November 31, 2000; Said funds shall be payable in cash or in common stock of Seller in a number of shares such that Seller shall receive the full amount of the Funds. 3. Rescission. All parties hereto understand, covenant, and agree that, notwithstanding anything to the contrary contained herein or in the Stock Purchase Agreement or the Amended Stock Purchase Agreement and/or any documents associated therewith or appurtenant thereto, Seller shall have the right, in its sole discretion, to rescind the Amended Stock Purchase Agreement which in case of such rescission shall be considered to be null, void, and of no further force or effect, if the monies contemplated herein (that is, the sum of Three Hundred Thousand and no/100 U.S. Dollars in cash or common stock of Seller) have not been fully paid as contemplated herein by 6:00 PM, Eastern Standard Time, on Thursday, November 31, 2000. 4. Time of the Essence. Time is be of the essence of this Addendum. ------------------- IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above. BUYER SELLER Scott Schuster Frank Noori CEO, Elite Technologies, Inc. President, International Electronic Technology of Georgia, Inc., d/b/a Startek Computers Date: ___________________________ Date: ____________________________________ ------------------------------------ ------------------------------------- Frank Noori, individually SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: November 10, 2000 ELITE TECHNOLOGIES, INC. By: /s/ Scott Schuster Name: Scott Schuster Title: Chief Executive Officer EX-27 2 0002.txt FDS
5 1000 3-mos May-31-2000 Jun-01-2000 Aug-31-2000 226,525 0 1,036,924 0 (586,848) 2,522,251 218,229 0 8,472,628 4,163,703 0 0 0 0 0 8,472,628 3,630,818 3,630,818 2,968,113 0 0 0 0 (2,755,502) 0 0 0 0 0 (2,755,502) (0.07) (0.07)
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