-----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, TtbSl0MkXsBhMuzYI4hZ6+iu5pgDobNgz1Izja7/qlZEyLpxpKeerFAdf+tUKPpX lmCaFeYrst0oFihOPkxiSQ== 0001108017-01-000081.txt : 20010315 0001108017-01-000081.hdr.sgml : 20010315 ACCESSION NUMBER: 0001108017-01-000081 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000901 FILED AS OF DATE: 20010314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELITE TECHNOLOGIES INC /TX/ CENTRAL INDEX KEY: 0000835909 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 760252296 STATE OF INCORPORATION: TX FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-17597 FILM NUMBER: 1568202 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/A 1 0001.txt - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |X| For the Quarterly Period ended November 30, 2000 Or | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM September 1, 2000 TO November 30, 2000 Commission File Number: 0-17597 ELITE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) 76-0252296 Texas (IRS Employer Identification No.) (State or other Jurisdiction of incorporation or organization) 30093 5050 Oakbrook Parkway (Zip Code) Suite 100 Norcross Georgia (Address of principal executive offices) 770-559-4975 (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 November 30, 2000, the latest practicable date, is as follows: 45,675,369 shares of Common Stock $.0001 par value. - -------------------------------------------------------------------------------- ELITE TECHNOLOGIES, INC. Index
PART I - FINANCIAL INFORMATION Item 1. Condensed Financial Statements: Consolidated Balance Sheet-November 30, 2000 and May 31, 2000. 3 Consolidated Statement of Operations-Three and Six Months Ended November 30, 2000 and November 30, 1999. 4 Consolidated Statement of Cash Flow-Six Months Ended November 5 30, 2000. Notes to Consolidated Financial Statements (unaudited) 6-8 Report on Review by Independent Accountants Item 2. Management's Discussion and Analysis of Financial Condition 8-9 And Results of Operations PART II - OTHER INFORMATION Item 3. Legal Proceedings 10 Item 4. Changes in Securities 10 Item 5. Defaults upon Senior Securities 10 Item 6. Submission of matters to Vote of Security Holders 10 Item 7. Other Information 10 Item 8. Exhibits and Reports on Form 8-K 10 Exhibit Index Signature 11
PART Item I Kirscher & Assoiciates, P.C. REPORT ON REVIEW BY INDEPENDENT ACCOUNTANTS To the board of Directors and stockholders Elite Technologies, Inc. and Subsidiaries We have reviewed the accompanying consolidated balance sheet of Elite Technologies, Inc., and Subsidiaries (the "Company") as of November 30, 2000 and the related consolidated statements of operations for the first three and six months ended November 30, 2000 and November 30, 1999 and the related consolidated statement of cash flows for the six months ended November 30, 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review on interim financial information consists principally of applying analytical procedures to financial data and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, with the exception of the matter described in the following paragraph, we are not aware of any material modifications that should be made to the aforementioned financial statements for them to be in conformity with generally accepted principles. A statement of cash flows for the six months ended November 30, 1999, the previous year, has not been presented. As described in the notes to the consolidated financial statements, generally accepted accounting principles require such a statement be presented when financial statements purport to present financial position and results of operations. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of May 31, 2000, and the related consolidated statements of operations, of stockholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated November 9, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information as set forth in the accompanying consolidated balance sheet from which it has been derived. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed further in the financial information, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. KIRSCHNER &ASSOCIATES, P.C. Marietta, Georgia January 16, 2001, except for Note on Compliance Review as to which the date is February 23, 2001.
ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) Restated November 30, May 31, 2000 2000 Assets Current assets: Cash and cash equivalents $246,596 - Accounts receivable, less allowance for doubtful accounts of $26,000 and $ 0 at November 30, 2000 and May 31, 2000, respectively. 1,403,355 - Note receivable on convertible debt obligation - 527,470 Receivable from officer 528,542 289,084 Other current assets 648,940 30,000 -------------- --------------- Total current assets 2,827,433 846,554 Property and equipment, net 195,809 31,004 Excess of cost over net assets of businesses acquired, less accumulated amortization of $ 1,364,186 and $ 597,198 at November 30, 2000, and May 31, 2000, 6,496,418 4,987,844 respectively Other assets 43,789 6,789 -------------- --------------- 9,563,449 5,872,191 ============== =============== Liabilities and Stockholders' Equity Current liabilities: Cash overdrafts - 35,106 Notes payable 441,682 112,895 Accounts payable 2,666,077 523,541 Accrued expenses 61,048 114,292 Federal payroll taxes payable 929,468 931,888 State payroll taxes payable 321,614 321,614 -------------- --------------- 4,419,889 2,039,336 -------------- --------------- Long-term liabilities: Notes payable - 100,000 Other long term debt 178,995 - Convertible note payable 1,035,599 1,035,599 -------------- --------------- Total liabilities 5,634,483 3,174,935 -------------- --------------- Stockholders' equity: Common stock, $.0001 par value; 500,000,000 shares authorized; 45,675,369 and 34,275,720 issued and outstanding at November 30, 2000 and May 31, 2000, respectively 4,567 3,427 Additional paid-in capital 39,372,817 35,206,634 Retained earnings (deficit) (35,448,418) (32,512,805) -------------- --------------- 3,928,966 2,697,256 -------------- --------------- 9,563,449 5,872,191 ============== ===============
The Notes to Financial Statements are an integral part of this statement. 3
ELITE TECHNOLOGIES, INC., AND SUBSIDIARIES Consolidated Statement of Operations (Unaudited) Three Months Ended Six Months Ended November 30, November 30, Restated Restated 2000 1999 2000 1999 Revenues $3,703,578 $400,013 $7,334,396 $778,010 3,595,238 - 6,563,351 - Cost of Sales -------------- ------------ ----------- -------------- Gross Profit 108,340 400,013 771,045 778,010 -------------- ------------ ----------- -------------- Salaries, wages and benefits (88,875) 16,456 239,226 102,106 Depreciation and amortization 466,222 - 766,988 - Other operating expenses 376,389 203,001 869,635 760,313 Investment banking fees - - 1,584,031 - --------------- ------------ ----------- -------------- 753,736 219,457 3,459,880 862,419 -------------- ------------ ----------- -------------- Operating income (loss) (645,396) 180,556 (2,688,835) (84,409) -------------- ------------ ----------- -------------- Interest expense - - 12,100 - Other expenses - net 15,546 - 17,259 - -------------- ------------ ----------- -------------- 15,546 - 29,359 - -------------- ------------ ----------- -------------- Loss before income taxes (660,942) 180,556 (2,718,194) (84,409) Income taxes - - - - -------------- ------------ ----------- -------------- Net loss ($660,942) $180,556 ($2,718,194) ($84,409) ============== ============= ============ ============== Net Earnings (Loss) Per Share of Common Stock: Basic and Diluted ($0.02) $0.01 ($0.07) ($0.01) =============== ============== ============ =============== Weighted Average Number of Common Shares Used In Calculating Net Loss Per Share of Common Stock: Basic and Diluted 37,877,635 12,570,000 41,578,630 12,647,085 =============== ================ ============ ================
The Notes to Financial Statements are an integral part of this statement. 4
ELITE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statement of Cash Flow (Unaudited) Restated Three Months Ended Six Months Ended November 30, November 30, 2000 2000 Cash flows from (to) operating activities: Net loss ($660,942) ($2,718,194) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 466,222 766,988 Commitment to issue stock for investment banking services - 1,584,031 Decrease (increase) in: Accounts receivable (366,431) (1,403,355) Note receivable - 527,470 Other assets 42,205 (618,940) Increase (decrease) in: Accounts payable 176,067 2,142,536 Payroll taxes payable - (2,420) Accrued expenses and other current liabilities 29,336 (53,244) -------------- ---------------- Net cash used in operating activities (313,543) 224,872 -------------- ---------------- Cash flows from (to) investing activities: Purchases of property and equipment - (244,204) Acquisition of businesses - (175,000) Receivable from officers 45,161 (239,458) -------------- ---------------- Net cash used in investing activities 45,161 (658,662) -------------- ----------------- Cash flows from (to) financing activities: Proceeds from issuance of common stock 223,645 140,000 Proceeds from issuance of long-term debt 50,783 425,000 Contributed capital - 150,492 -------------- ---------------- Net cash provided by financing activities 274,428 715,492 -------------- ---------------- Net increase (decrease) in cash 6,046 281,702 Cash and cash equivalents at beginning of period 240,550 (35,106) -------------- ---------------- Cash and cash equivalents at end of period $246,596 $246,596 ============== ================ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $12,100 $12,100 -------------- ---------------- Income taxes - - -------------- ---------------- Acquision of businesses: Fair value of assets acquired, including goodwill - $2,275,562 Fair value of liabilities assumed - - Promissory note issued - (425,000) Fair value of common stock issued - (1,675,562) -------------- ---------------- Net cash paid for acquisitions - $175,000 ============== ================
The Notes to Financial Statements are an integral part of this statement. 5 ELITE TECHNOLOGIES, INC., AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS November 30, 2000 (UNAUDITED) Accounting Policies In the opinion of management the accompanying unaudited consolidated financial statements reflect all normal adjustments, exclusive of any adjustments that may be required as a result of going concern issues discussed further in the financial information, necessary to present fairly the financial position of Elite Technologies, Inc., and Subsidiaries at November 30, 2000 and the results of operations for the three and six months ended November 30, 2000 and 1999 and cash flows for the three and six months ended November 30, 2000. The results of operations for the three and six month periods ended November 30, 2000 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year May 31, 2001. The financial information as of November 30, 2000 should be read in conjunction with the financial statements contained in Elite Technologies, Inc. Form 10-K/A Annual Report for 2000. 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. Cash overdrafts are classified as debt. 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. 6 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. Statement of Cash Flows The statement of cash flows for the three and six months ended November 30, 1999 has not been presented. Generally accepted accounting principles require that a statement be presented when financial statements purport to present financial position and results of operations. Record keeping limitations prevented certain accumulation of cash flow data. Accordingly, management is unable to present the statement of cash flows for that period, at this time. 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. Compliance Review Management received a compliance review letter from the United States Securities and Exchange Commission dated November 20, 2000. The principle provisions of the letter involve interpretation of valuation practices of the Company's common stock issued subsequent to May 31, 1999. The following schedule summarizes the major differences between management and the Commission as impacting the Company's financial position as of November 30, 2000, and the results of operations for the six months then ended:
Form 10-Q and Form 10-Q/A and Financial statements Financial statements As originally filed As amended Depreciation and amortization $231,250 $766,988 Investment banking fees 2,465,500 1,584,031 Net loss (3,155,020) (2,718,194) Loss per share (0.08) (.07) Goodwill, net of amortization 5,572,109 6,496,418 Total assets 8,548,045 9,563,449 Additional paid-in capital 14,190,140 39,372,817 Retained earnings (deficit) (11,284,845) (35,448,418) Stockholders' equity 2,909,462 3,928,966
7 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. 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. The company 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. Elite through its divisions offered a variety of services in fiscal year 2000. Accordingly, 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. 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 5050 Oakbrook Parkway, Suite 100 Norcross, Georgia 30093. Telephone: (770)-559-4975. The Company's Internet address is www.elitetech-usa.com. RECENT DEVELOPMENTS Elite's objective is to establish itself as a leading provider of content solutions, hardware distribution, software development services, and kiosk manufacturing/distribution. The Company intends to utilize acquisitions to support the growth of its business, such as content and hardware providers. The Company intends to utilize the kiosk'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. 8 On December 15, 2000, the Company entered into a Letter of Intent with Intelligent Software Solutions, Inc. for the purchase and exclusive distribution of its kiosk units in Puerto Rico and the Caribbean Islands. A definitive agreement is expected to be executed in January 2001. The contract will require a minimum purchase by Intelligent Software Solutions, Inc. per month. On December 29, 2000, the Company entered into a letter of intent to purchase Smartmedia, Inc. The company expects to reach a definitive agreement in January 2001. Smartmedia provides a patent pending technology that uses wireless telemetry technology in the newspaper and shipping industries. In January 2001, the Company consolidated its operations to one address to reduce its expenditures for operational costs. In December 2000 the company satisfied the $300,000 indebtedness as to owned under the purchase agreement of IET, International Electronic Technology of Georgia ( "IET"). Payment was made in stock. RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED NOVEMBER 30, 2000 AND NOVEMBER 30, 1999. Revenues. Revenues from operations for the second quarter ended November 30, 2000 increased by 826% from the same period, 1999. Revenues for the six months ended November 30, 2000, increased by 842.7% from the same period, 1999. The increase in revenues is related to (i) the internal restructuring of the business and (ii) the acquisition of International Electronic Technology of Georgia (IET) and AC Travel. Salaries, Wages and Benefits. Salaries, Wages and Benefits, of ($88,875) is represented by payroll adjustments as made by a newly acquired company. An increase of $137,120 and 134.3% higher for the six months ended November 30, 2000 over the same period, 1999. The increase is due primarily to the acquisition of IET. Other Operating Expenses. Other Operating Expenses increased by $173,388 and 85% during the second quarter ended November 30, 2000 over the same quarter ended, 1999. The increase of $ 109,322 and 14% for the six-month period ended November 30, 2000, over the same period, 1999. These increases are attributed to the restructuring of the business and the recent acquisition of IET and AC Travel. Depreciation and Amortization. Elite depreciates its assets, including goodwill, on a straight-line basis over three to five years. Depreciation and amortization increased to $ 766,988. This is attributed to the amortization of goodwill recorded in connection with the acquisitions completed in 2000. Net Loss. Net losses decreased to $ 2,718,194 as a function of the Compliance review as stated above. 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 during the third and fourth quarters 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. 9 PART II OTHER INFORMATION ITEM 3. 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 4. CHANGES IN SECURITIES. The company issued securities in exchange for $140,000 in cash during the second quarter. ITEM 5. DEFAULTS UPON SENIOR SECURITIES. NONE ITEM 6. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. NONE ITEM 7. OTHER INFORMATION. NONE ITEM 8. EXHIBITS AND REPORTS ON FORM 8-K. NONE 10 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: January 16, 2001 ELITE TECHNOLOGIES, INC. February 23, 2001 By:/s/ Scott Schuster Name: Scott Schuster Title: Chief Executive Officer 11 -----END PRIVACY-ENHANCED MESSAGE-----