-----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, DTRTDa2Bt5XH2rkKV6BSW3j8GOZqZzC8gvULdXqTTkyGRA/lRr6Pnn+EOX8o7C8b POlBzkwuA8pCaZRmLaWzgA== 0000950148-96-002449.txt : 19961106 0000950148-96-002449.hdr.sgml : 19961106 ACCESSION NUMBER: 0000950148-96-002449 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MATERIAL TECHNOLOGY INC CENTRAL INDEX KEY: 0000929425 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 954453386 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-83526 FILM NUMBER: 96654326 BUSINESS ADDRESS: STREET 1: 11835 WEST OLYMPIC BLVD STREET 2: EAST TOWER STE 705 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3102085589 MAIL ADDRESS: STREET 1: 11835 WEST OLYMPIC BLVD STREET 2: EAST TOWER STE 705 CITY: LOS ANGELES STATE: CA ZIP: 90064 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: September 30, 1996 Commission file number: 3383526 MATERIAL TECHNOLOGY, INC. ------------------------- (Exact name of registrant as specified in its charter) Delaware 95-4453386 - --------------------------------------------- ------------------ (State or other jurisdiction of incorporation (IRS Employer or organization) identification No.) 11835 West Olympic Boulevard East Tower 705 Los Angeles, California --------------------------------------- (address of principal executive offices) (Zip Code) 90064 (310) 208-5589 --------------------------------------- (Registrant's telephone number including area code) Securities Registered pursuant to Section 12(g) of the Act: Common 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 X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 or Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this form 10-K. [ ] The aggregate market value of the voting stock held by Non-affiliates of the registrant at October 25, 1996 was 3,447,211. Documents incorporated by reference - None. 2 INDEX
PAGE ---- Part 1. Financial Statements Balance Sheets 3 - 4 Statements of Operations - Third Quarter Ended September 30, 1995 and 1996 and from the Company's inception (October 21, 1983) through September 30, 1996 5 Statements of Cash Flows Third Quarter Ended September 30, 1995 and 1996 and from the Company's inception (October 21, 1983) through September 30, 1996 6 - 7 Notes to Financial Statements 8 Management's Discussion and Analysis 9 - 10 Part 2. Other Information 11
2 3 MATERIAL TECHNOLOGY, INC. (A Development Stage Company) BALANCE SHEETS ASSETS
December 31, September 30, 1995 1996 ----------- ------------- (Unaudited) CURRENT ASSETS Cash and Cash Equivalents $ 1,226 $ 23,165 Loan Recievable - 1,616 --------- ----------- TOTAL CURRENT ASSETS 1,226 24,781 --------- ----------- FIXED ASSETS Property and Equipment, Net of Accumulated Depreciation 100,958 97,788 --------- ----------- OTHER ASSETS Intangible Assets, Net of Accumulated Amortization 22,658 31,167 Investment in Tensiodyne Corporation - - Note Receivable (Including Accrued Interest) 23,661 25,185 Refundable Deposit 2,189 2,189 --------- ----------- TOTAL OTHER ASSETS 48,508 58,541 --------- ----------- TOTAL ASSETS $ 150,692 $ 181,110 ========= ===========
See accompanying notes 3 4 MATERIAL TECHNOLOGY, INC. (A Development Stage Company) BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' (DEFICIT)
December 31, September 30, 1995 1996 ----------- ------------- (Unaudited) CURRENT LIABILITIES Legal Fees Payable $ 111,343 $ 106,343 Accounts Payable - Other 30,236 30,023 Accrued Officers Salary 172,000 389,500 Loan Payable - Officer 23,272 1,796 Loan Payable - Others 84,439 84,269 Payable on Research and Development Sponsorship 188,495 188,495 ----------- ----------- TOTAL CURRENT LIABILITIES 609,785 800,426 Loans Payable - Officer 113,268 122,285 Loans Payable - Other 60,829 63,567 ----------- ----------- TOTAL LIABILITIES 783,882 986,278 ----------- ----------- REDEEMABLE PREFERRED STOCK Class B Preferred Stock, $.001 Par Value Authorized 510 Shares, Outstanding 15 Shares at December 31, 1995 and March 31, 1996; Redeemable at $10,000 Per Share After January 31, 2004 150,000 150,000 ----------- ----------- STOCKHOLDERS' EQUITY (DEFICIT) Class A Common Stock, $.001 Par Value, Authorized 10,000,000 Shares, Outstanding 2,157,880, at December 31, 1995, and 2,221,880 Shares at September 30, 1996 2,157 2,221 Class B Common Stock, $.001 Par Value, Authorized 300,000 Shares, Outstanding 60,000 Shares 60 60 Class A Preferred, $.001 Par Value, Authorized 10,000,000 Shares Outstanding 350,000 Shares 350 350 Additional Paid in Capital 1,763,698 1,937,674 Less Notes Receivable - Common Stock (14,720) (14,720) Deficit Accumulated During the Development Stage (2,380,135) (2,726,153) ----------- ----------- (628,590) (800,568) Less: Treasury Stock (62,000 Shares of Class A Common) - At Cost (154,600) (154,600) ----------- ----------- TOTAL STOCKHOLDERS' (DEFICIT) (783,190) (955,168) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 150,692 $ 181,110 =========== ===========
See accompanying notes 4 5 MATERIAL TECHNOLOGY, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS
From Inception For the Three Months Ended For the Nine Months Ended (October 21, 1983) September 30, September 30, Through 1995 1996 1995 1996 September 30, 1996 ----------- ----------- ----------- ------------- ------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) REVENUES Sale of Fatigue Fuses $ -- $ -- $ -- $ -- $ 64,505 Sale of Royalty Interests -- -- -- -- 198,750 Research and Development Revenue -- -- -- -- 712,580 Test Services -- -- -- -- 10,870 --------- ---------- ---------- ------------- ------------ TOTAL REVENUES -- -- -- -- 986,705 --------- ---------- ---------- ------------- ------------ COSTS AND EXPENSES Research and Development 3,964 -- 15,104 -- 1,497,596 General and Administrative 50,020 163,772 138,912 357,198 2,035,220 --------- ---------- ---------- ------------- ------------ TOTAL COSTS AND EXPENSES 53,984 163,772 154,016 357,198 3,532,816 --------- ---------- ---------- ------------- ------------ INCOME (LOSS) FROM OPERATIONS (53,984) (163,772) (154,016) (357,198) (2,546,111) --------- ---------- ---------- ------------- ------------ OTHER INCOME (EXPENSE) Expense Reimbursed -- -- (18,802) Interest Income 485 500 1,433 1,524 38,584 Gain on Sale of Tensiodyne Corporation Common Stock -- -- -- 9,656 9,656 Miscellaneous Income -- -- -- -- 25,145 Loss on Sale of Equipment -- -- -- -- (12,780) Settlement of Teaming Agreement -- -- -- -- 50,000 Litigation Settlement -- -- -- -- 18,095 --------- ---------- ---------- ------------- ------------ TOTAL OTHER INCOME 485 500 1,433 11,180 109,898 --------- ---------- ---------- ------------- ------------ NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AND PROVISION FOR INCOME TAXES (53,499) (163,272) (152,583) (346,018) (2,436,213) PROVISION FOR INCOME TAXES -- -- -- -- (7,000) --------- ---------- ---------- ------------- ------------ NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS (53,499) (163,272) (152,583) (346,018) (2,443,213) EXTRAORDINARY ITEMS Forgiveness of Debt -- -- -- -- (289,940) Utilization of Operating Loss Carry forward -- -- -- -- 7,000 --------- ---------- ---------- ------------- ------------ NET INCOME (LOSS) $ (53,499) $ (163,272) $ (152,583) $ (346,018) $ (2,726,153) ========= ========== ========== ============= ============ PER SHARE DATA Income (Loss) Before Extraordinary Item $ (0.16) Extraordinary Items -- ------------- NET INCOME (LOSS) $ (0.16) ------------- COMMON SHARES OUTSTANDING 2,221,880 =============
See accompanying notes 5 6 MATERIAL TECHNOLOGY, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS
From Inception For the Three Months Ended For the Nine Months Ended (October 21, 1983) September 30, September 30, Through 1995 1996 1995 1996 September 30, 1996 ----------- ----------- ---------- ---------- ------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $(53,499) $(163,272) $(152,583) $(346,018) $(2,726,153) -------- --------- --------- --------- ----------- Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation and Amortization 1,389 1,885 4,166 4,661 159,445 Gain on Sale of Tensiodyne Corporation Common Stock -- -- -- (9,656) (9,656) Charge off of Deferred Offering Costs -- -- 31,480 -- 31,480 Loss on Sale of Equipment -- -- -- -- 12,780 Issuance of Common Stock for Services -- -- -- -- 279,498 Issuance of Stock for Agreement Modification -- -- -- -- 152 Forgiveness of Indebtedness -- -- -- -- 165,000 Increase (Decrease) in Accounts Payable and Accrued Expenses 702 112,500 2,054 212,286 525,864 Interest Accrued on Note Payable -- 3,919 -- 11,755 22,625 Increase in Research and Development Sponsorship Payable -- -- -- -- 188,495 (Increase) in Note for Litigation Settlement (484) (500) (1,424) (1,523) (25,184) (Increase) in Deposits -- -- -- -- (2,189) -------- --------- --------- --------- ----------- TOTAL ADJUSTMENTS 1,607 117,804 36,276 217,523 1,348,310 -------- --------- --------- --------- ----------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (51,892) (45,468) (116,307) (128,495) (1,377,843) -------- --------- --------- --------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds From Sale of Equipment -- -- -- -- 10,250 Proceeds from Sale of Tensiodyne Corporation -- Common Stock -- -- -- 9,656 9,656 Purchase of Property and Equipment -- -- -- -- (226,109) (Increase) in Patent Costs -- -- (10,000) (10,000) (Increase) in Other Assets -- -- -- -- (69,069) Payment for License Agreement -- -- -- -- (6,250) -------- --------- --------- --------- ----------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES -- -- -- (344) (291,522) -------- --------- --------- --------- -----------
See accompanying notes 6 7 MATERIAL TECHNOLOGY, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS
From Inception For the Three Months Ended For the Nine Months Ended (October 21, 1983) September 30, September 30, Through 1995 1996 1995 1996 September 30, 1996 ------------ ---------- ---------- ---------- ------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of Common Stock Net of Offering Costs $ -- $ 36,540 -- 174,040 732,319 Costs incurred in Offering -- -- -- -- (31,480) Sale of Common Stock Warrants -- -- -- -- 18,250 Sale of Preferred Stock -- -- -- -- 258,500 Sale of Redeemable Preferred Stock -- -- -- -- 150,000 Capital Contributions -- -- -- -- 301,068 Loans From Officers -- -- 70,685 34,324 347,381 Repayments to Officer -- (25,200) -- (55,800) (221,386) ( Increase) in Loans - Other -- -- (1,616) (1,616) Increase (Decrease) in Loan Payable-Others 58,000 -- 58,000 (170) 139,494 -------- --------- --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: 58,000 11,340 128,685 150,778 1,692,530 -------- --------- --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,108 (34,128) 12,378 21,939 23,165 BEGINNING BALANCE CASH AND CASH EQUIVALENTS -- 57,293 (6,270) 1,226 -- -------- --------- --------- --------- --------- ENDING BALANCE CASH AND CASH EQUIVALENTS $ 6,108 $ 23,165 $ 6,108 $ 23,165 23,165 ======== ========= ========= ========= =========
See accompanying notes 7 8 MATERIAL TECHNOLOGY, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS NOTE 1. In the opinion of the Company's management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 1995 and 1996 and the results of operations and cash flows for the three month periods then ended. The operating results of the Company on a quarterly basis may not be indicative of operating results for the full year. 8 9 MATERIAL TECHNOLOGY, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 The Company had no sales during the nine month periods ended September 30, 1995, and 1996. The only revenue generated during the first three quarters of 1995 was interest in the amount of $1,433 which consisted of interest that accrued on a note due the Company. Revenue generated during the first three quarters of 1996 consisted of interest of $1,524 which accrued on a note due the Company and $9,656 on the sale common stock of Tensiodyne Corporation which the Company received on settlement of past claims which it had against Tensiodyne. During the nine month period ended September 30, 1995, the Company incurred approximately $15,104 in development costs all of which related to testing. The Company did not incur any expenses relating to its product development during 1996. General and administration costs were $138,912 and $357,198, respectively, for the nine-month periods ended September 30, 1995 and 1996. The major costs incurred during the first nine months of 1995 consisted of travel of $27,214, telephone of $16,800, rent of $8,760, professional fees of $19,617, office expense of $19,737, and the charge off to operations of deferred offering costs of $31,480. The major costs incurred during 1996, consisted of officer's salary of $217,500, professional fees of approximately $54,259, telephone expense of approximately $16,231, office expense of $6,717, rent of $16,307, interest expense of $11,757, and filing fees of $3,050. FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 The Company had no sales during the three month periods ended September 30, 1995, and 1996. The only revenue generated during the third quarters of 1995 and 1996 was interest in the amounts of $485 and $500, respectively. The interest income consisted of interest which accrued on a note due the Company. During the three month period ended September 30, 1995, the Company incurred approximately $3,964 in development costs all of which related to testing. The Company did not incur any expenses relating to its product development during the 1996. General and administration costs were $50,020 and $163,772 respectively, for the three-month periods ended September 30, 1995 and 1996. The major costs incurred during the three months of 1995 consisted of travel expense of $9,388, telephone of $6,302, office expense of $11,968, and the professional services of $18,047. The major costs incurred during 1996, consisted of professional fees of approximately $19,811, telephone expense of approximately $5,522, travel of $5,846, rent of $5,435, interest expense of $3,919, and officer's salary of $112,500. 9 10 LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents as of September 30, 1995 and 1996 were $6,108, and $23,165, respectively. During 1995, the Company received $70,685 from officer loans and $58,000 in loans from a third party. Of the $128,685 borrowed in 1995, $116,307 was used in operations and $6,270 covered the Company's overdraft as of December 31, 1994. During 1996, the Company received $174,040 through the issuance of 64,000 shares of its common stock pursuant to the Company's Stock Option Plan, $34,324 from Officer advances, and $9,656 from the sale of Tensiodyne Corporation common stock. Of the $218,020 received in 1996, $45,468 was used in operations, $10,000 was used in obtaining a patent, $55,800 was repaid on officer advances, and $1,786 was repaid on third party loans. 10 11 PART II. OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES During the nine month period ended September 30, 1996, the Company recieved $174,040 through the issuance of 64,000 shares of its common stock pursuant to the Company's Stock Option Plan. $25,000 was received during the first quarter through the issuance of 10,000 shares to the Company's Secretary. $112,500 was received through the issuance of 40,000 shares to Company consultants during the second quarter and $36,540 was received during the third quarter through the issuance of 14,000 shares to the Company's Secretary. 11 12 PURSUANT TO THE REQUIREMENTS OF SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. MATERIAL TECHNOLOGY, INC. REGISTRANT /s/ ROBERT M. BERNSTEIN ----------------------------------- ROBERT M. BERNSTEIN, PRESIDENT AND CHIEF FINANCIAL OFFICER DATE: ,1996 ----------------------- 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 23,165 0 1,616 0 0 24,781 97,788 0 181,110 800,426 0 350 0 2,281 (955,168) 181,110 0 0 0 0 357,198 0 0 (346,018) 0 (346,018) 0 0 0 (346,018) (0.16) (0.16)
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