-----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, UiUpO1VnZVBvd5zjvZnugRoZC5RbtrdggwihuceUKanJI7YTpu5rRgufV5XDga7c B56pRBB2xbGB5ZYRM2PVNg== 0000849401-99-000026.txt : 19991115 0000849401-99-000026.hdr.sgml : 19991115 ACCESSION NUMBER: 0000849401-99-000026 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADM TRONICS UNLIMITED INC/DE CENTRAL INDEX KEY: 0000849401 STANDARD INDUSTRIAL CLASSIFICATION: ADHESIVES & SEALANTS [2891] IRS NUMBER: 221896032 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-17629 FILM NUMBER: 99747041 BUSINESS ADDRESS: STREET 1: 224 S PEGASUS AVE CITY: NORTHVALE STATE: NJ ZIP: 07647 BUSINESS PHONE: 2017676040 MAIL ADDRESS: STREET 1: 224 S PEGASUS AVE CITY: MORTHVALE STATE: NJ ZIP: 07647 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 OR [ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to ______ Commission File No. 0-17629 ADM TRONICS UNLIMITED, INC. (Exact name of small business issuer as specified in its Charter) Delaware 22-1896032 (State or Other Jurisd- (I.R.S. Employer Identifi- iction of Incorporation cation Number) or organization) 224-S Pegasus Avenue, Northvale, New Jersey 07647 (Address of Principal Executive Offices) Issuer's Telephone Number, including Area Code: (201) 767-6040 Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Issuer was required to file such reports), and (2) has been subject to the filing requirements for at least the 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: 47,382,037 shares of Common Stock, $.0005 par value, as of November 9, 1999 Transitional Small Business disclosure format (check one): YES _____ NO X ADM TRONICS UNLIMITED, INC. INDEX Part I. Financial Information Page Number Item 1. Consolidated Financial Statements: Consolidated Balance Sheets - September 30, 1999 and March 31, 1999 2 Consolidated Statements of Operations - For The Three Months Ended September 30, 1999 and 1999 and For The Six Months Ended September 30, 1999 and 1998 3 Consolidated Statements of Changes in Stockholders' Equity - For The Six Months Ended September 30, 1999 4 Consolidated Statements of Cash Flows - For The Six Months Ended September 30, 1999 and 1998 5-6 Notes To Consolidated Financial Statements 7 Item 2. Management's Discussion And Analysis of Financial Condition and Results of Operations 7-8 1 ADM TRONICS UNLIMITED, INC. CONSOLIDATED BALANCE SHEETS September 30, March 31, 1999 1999 (Unaudited) ASSETS CURRENT ASSETS: Cash and equivalents $ 391,795 496,405 Accounts receivable--trade less allowance for doubtful accounts of $52,200 and $20,500 respectively 543,612 353,976 Inventories: Raw materials and supplies 687,672 392,066 Finished goods 77,865 56,226 Other current assets 24,086 102,600 Total Current Assets 1,725,030 1,401,273 Property and Equipment 168,571 185,916 Equipment in use and under lease agreements, net of accumulated depreciation of $209,311 and $60,164, respectively 633,119 736,566 Equipment held for sale 760,531 736,507 Loan receivable from officer, bearing interest at 3% per annum 64,591 65,191 Other Assets 247,924 218,088 Total Assets $ 3,599,766 $3,343,541 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable--trade 498,423 273,483 Accrued expenses and other 112,235 59,385 Notes payable - current 183,918 145,091 Total Current Liabilities 794,576 477,959 Notes payable - non-current -0- -0- Stockholders' Equity 2,805,190 2,865,582 Total Liabilities & Stockholders' Equity $3,599,766 $3,343,541 See accompanying notes to consolidated financial statements 2 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1999 1998 1999 1998 Revenues: Net sales $ 794,215 $ 445,281 $1,370,688 $1,001,103 Costs And Expenses: Cost of sales 499,513 221,547 627,084 497,417 Selling, general and 428,662 385,342 851,345 763,145 administrative Total cost and expenses 928,175 606,889 1,478,429 1,260,562 Operating Income(loss) ($ 133,960) ($ 161,608) ($ 107,741) ($259,459) Other Income 13,869 9,207 27,349 20,308 Net Income (loss) ($ 120,091) ($ 152,401) ($ 80,392) ($239,151) Net income (loss) per common share (0.003) (0.003) (0.002) (0.005) See accompanying notes to consolidated financial statements. 3 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 (Unaudited) Common Capital In Stock Par Excess Of Accumulated Shares Value Par Value Deficit Total Balance, March 31, 1999 47,382,037 23,691 6,740,718 (3,898,827) 2,865,582 Common stock options issued 20,000 Net income (loss) Six months ended September 30, 1999 (80,392) (80,392) Balance September 30, 1999 47,382,037 23,691 6,760,718 (3,979,219) 2,805,190 See accompanying notes to consolidated financial statements 4 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended September 30, 1998 1998 Cash Flows From Operating Activities: Net income(loss) ($ 80,392) ($ 239,151) Adjustments to reconcile net income(loss) to net cash flows from operating activities: Depreciation and amortization 121,393 42,578 Stock issued for services -0- 83,953 Loss on disposal of equipment 1,181 -0- Changes in operating assets and liabilities: Accounts receivable--trade (189,636) (7,207) Inventories (296,889) (2,940) Other current assets 78,514 41,797 Equipment in use or under lease 33,951 5,015 Equipment held for sale or lease (24,024) (339) Net change in other assets (9,849) (701) Accounts payable--trade 224,940 (246,234) Accrued expenses and prepayments from customers 52,850 34,335 Net cash flows provided by (used in) operating activities (87,961) (288,894) Cash Flows From Investing Activities: Purchases of property and equipment (7,256) (14,352) Acquisition of SofPulse assets -0- (178,000) Cash consideration paid for company acquired (48,820) -0- Loan to officer net of repayments 600 (7,952) Net cash flows provided by (used in) investing activities (55,476) (200,304) Cash Flows From Financing Activities: Additional borrowings of notes payable 154,831 -0- Payment on notes payable (116,004) (27,451) Net cash flows provided by (used in) financing activities 38,827 (27,451) Net change in cash and cash equivalents (104,610) (516,649) Cash and cash equivalents-- Beginning of period 496,405 1,127,847 Cash and cash equivalents-- End of period 391,795 611,198 See accompanying notes to consolidated financial statements 5 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED SEPTEMBER 30, 1999 1998 Supplemental disclosure of Cash flow activities: Interest paid 7,265 4,900 Non-cash investing and financing activities: Fair value of assets acquired relating to SofPulse assets 1,605,135 Fair value of assets acquired related to Needleeater business 68,820 Common stock issued in connection with acquisition of SofPulse assets 1,427,135 Common stock issued in connection with consulting agreement 138,115 Common stock options issued in connection with acquisition of Needleeater business 20,000 See accompanying notes to consolidated financial statements 6 ADM TRONICS UNLIMITED, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - Basis of Presentation: The consolidated balance sheet at the end of the preceding fiscal year has been derived from the audited consolidated balance sheet contained in the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 1999 (the "Form 10-KSB") and is presented for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and changes in financial positions for all periods presented have been made. The results of operations for interim periods are not necessarily indicative of the operating results for the full year. Footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Form 10-KSB. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At September 30, 1999 the Company had cash and equivalents of $391,795 as compared to $496,405 at March 31, 1999. This decrease was the result of net cash flows used in operating activities and investing activities offset by net cash flows provided by financing activities. Operating Activities Net cash flows used decreased $200,933 to ($87,961) for the six months ended September 30, 1999 as compared to net cash flows of ($288,894) for six months ended September 30, 1998. This decrease was primarily the result of a significant increase in accounts receivable and inventories offset by a the operating loss and depreciation and increased accounts payable for the period ended September 30, 1999. Investing Activities Capital expenditures consisted of $7,256 for the purchase of equipment and furniture. Financing Activities The Company borrowed $154,831 of which $150,000 a portion of a new line of credit with the Company's primary bank. The Company repaid $116,004 in notes payable, primarily paying-off the old line of credit. The Company does not have any material external sources of liquidity or unused sources of funds. 7 Results of Operations Quarter Ended September 30, 1999 Revenues Revenues were $794,215 in 1999 as compared to $445,281 in 1998 representing an increase of $348,934 or 78%. Revenues from the Company's medical electronics activities increased $295,189 and chemical revenues increased $53,745 over revenues for 1998. Gross Profit Gross profit of $294,702 in 1999 as compared to $223,734 in 1998 was $70,968, or 32%, above the gross profit in 1998. Gross profit was 37% of revenues in 1999 as compared with 50% of revenues in 1998. The reduction in gross profit margin was due primarily to the product mix of sales with increased sales of products with a lower gross margin. Operating Income(Loss) Operating loss in 1999 was ($133,960) compared to ($161,608) in 1998. Selling general and administrative expenses increased by $43,320 primarily due to an increase in payroll for sales personnel. Other Income Other income in 1999 was $13,869 as compared to $9,207. The increase was primarily due to the collection of rental income from a sub-tenant offset by a decrease in interest income from reduced amounts invested. Results of Operations Six Months Ended September 30, 1999 Revenues Revenues were $1,370,688 in 1999 as compared to $1,001,103 in 1998 representing an increase of $369,585 or 37%. Revenues from the Company's medical elec- tronics activities increased $301,923 and chemical revenues increase $67,662. Gross Profit Gross profit of $743,604 in 1999 as compared to $503,686 in 1998 was $239,918, or 48% above the gross profit in 1998. Gross profit was 54% of revenues in 1999 and 50% 1998. The increase in gross profit is due to the mix in product sales with higher sales of products with a higher gross margin. Operating Income(Loss) Operating loss was ($107,741) in 1999 compared to ($259,459) in 1998. Selling, general and administrative expenses increased by $88,200 due to an increase in payroll for sales personnel. Other Income Other income of $27,349 in 1999 increased $7,041 from $20,308 in 1998, primarily due to the collection of rent income from a sub-tenant offset by a decrease in interest income from reduced amounts invested. 8 SIGNATURES Pursuant to the requirements of the Exchange Act, the Issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ADM Tronics Unlimited, Inc. By:\s\Alfonso DiMino Dr. Alfonso DiMino President and Chief Executive Officer And By:\s\Andre' DiMino Andre' DiMino Principal Financial Officer Dated: Northvale, New Jersey November 9, 1999 -----END PRIVACY-ENHANCED MESSAGE-----