SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED: JUNE 30, 20002001 COMMISSION FILE NO. 0-4076
--------------------------- ------
EXOTECH INCORPORATED
--------------------
(Exact name of Registrant as Specified in Charter)
State or Jurisdiction of
Incorporation or Organization:STATE OR JURISDICTION OF
INCORPORATION OR ORGANIZATION: DELAWARE
IRS Identification No:IDENTIFICATION NO: 54-0700888
Address of Principal Office:ADDRESS OF PRINCIPAL OFFICE: 8502 Dakota Drive
Gaithersburg,DAKOTA DRIVE
GAITHERSBURG, MD. 20877
Registrant's Telephone Number:REGISTRANT'S TELEPHONE NUMBER: (301) 948-3060
SECURITIES REGISTERED PURSUANT TO
SECTION 12 (b) OF THE EXCHANGE ACT
NoneNONE
----
SECURITIES REGISTERED PURSUANT TO
SECTION 12 (g) OF THE ACT
Common Stock par valueCOMMON STOCK PAR VALUE $0.10 per share.PER SHARE.
Indicate by checkmark 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
requirement for the past 90 days.
Yes [X][x] No [_][ ]
At June 30, 2000,2001, 942,387 shares of Common Stock were outstanding, and the
aggregate market value of the Common Stock of Exotech Inc. held by nonaffiliates
was approximately $73,280.$61,273.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
ITEM 1. GENERAL DESCRIPTION AND BUSINESS ACTIVITIES
A. GeneralGENERAL - There have been no changes in the organization of the
Company -------
during the past fiscal year. However in the face of significantly
reduced sales of instrumentation products, substantial downsizing of staff and
occupied area of shop space was implemented. The Company has been neitherwas not a party to nor
contemplates, any
actions of bankruptcy, receivership, or reorganization during the past or current fiscal
years.year. No material assets were acquired, no acquisitions or dispositions are
anticipated. The basic nature and conduct of the business is expected to
continue as in the past.current year in its present downsized condition.
B. Financial information about industry segmentsFINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS - In the opinion of
---------------------------------------------
Management, the Company has one industry segment: (1) electro-optics and
electronic instrument systems and related services.
1. Electro-optics productsELECTRO-OPTICS PRODUCTS - The Company's principal products are:
(1) a
----------------------- laser bacteria colony counter used in food and drug processing and
laboratory testing environments, (2) a printed circuit board (PCIB) which
interfaces the laser-scanner instrument with many models of the personal
computers and (3) a
crystallographic scanner that evaluates the lattice structure orientation of
semiconductor crystals on the basis of surface morphology measurements, (4) a hand-held four channel-ground truth radiometer used for
earth resource studies in conjunction with the LANDSAT satellite and also
independent studies, and (5)
an automated spiral plater that precisely and rapidly dispenses microbial
samples onto rotating agar plates used in laboratories performing bacterial
enumeration work.studies.
These products are currently marketed world-wide.world wide by advertisements in
several industrial directories and the Company's web site. Spiral Biotech, Inc.
iswas the exclusive representative of products 1 2 and 5.2. These products and related
service work have accounted for 94 percent of the Company's sales in the pastfiscal 2000
year and about 90 and 91 percent in the prior two fiscal years. The otheryear. All products are now sold
directly by the Company. They are built for inventory in lots of 25 or more
units, with two or more lotsa lot of the well established products generally being sold in about
one year. These products will behave been updated periodically to keep them abreast of
new technological developments to remain viable products of the Company. In December 1994 the Company accepted a contract
from Spiral Biotech, Inc. to design an automated spiral plater (Autoplate) to
replace a model that was being imported from Holland. In May 1995 a
demonstration model of the instrument was delivered and subsequently the Company
received an order for 22 production units. This production was completed in the
first six months of fiscal year 1996. An additional 260 units of this instrument
have been manufactured and delivered in fiscal years 1997 through 2000. A
modulation transfer function (MTF) tester, used for quality control in the
manufacture of low light level image intensifier tubes, is not in regular
production but would be manufactured to fill customers' orders. This instrument
was initially produced for the U. S. Army and delivered during fiscal year 1979.
The Company developed an adapter assembly for these test instruments that
updates them to test the latest versions of image intensifier tubes. Over the past
twenty years the Company has provided support to the U. S. Army and its
contractors in the form of repair maintenance and calibration services. The
contracts for these services are fixed price. There were two contractswas a contract for these
services in the past fiscal year and purchase orders for calibration services in
the current fiscal year are expected from government contractors using two of
the MTF
tester systems.
The Crystallographic Scanner, developed in fiscal year 1987, redesigned
into a manufacturing model in fiscal year 1988, was put into production in 1989.
The first unit was delivered to the customer in May 1989. In 1992, a system
upgrade was designed and sold for this instrument. Marketing effort
2
continues through correspondence and personal contacts, as well as personal
presentations to introduce this product to semiconductor crystal growers,
processors and manufacturers. However, there have been no sales of this
instrument over the past eight years. The Company is currently engaged with the
National Institute of Standards and Technology in a cooperative R&D agreement
with the objective to calibrate the Exotech Scanner method with respect to the
Bragg Angle method of determining crystal axis orientation. Validation of our
instrument's capability vis-a-vis the X-ray methods will overcome a persistent
impediment to sales of Exotech's Scanner to producers of semiconductor wafers.
There are potential customers that show continued interest in the scanner, but
must be convinced of correlation with the traditional X-ray results.
Some of the component parts for the products discussed above are
fabricated to the Company's specifications and design. Other parts are standard
electronic or optical components available off-the-shelf. The availability of
these components is dependent upon several independent manufacturers and
distributors. Delays due to strikes, material availability or scheduling
problems could adversely affect the Company's assembly and delivery schedules. A
few parts have only one source; however, the suppliers are proven, reliable
businesses. The Company does not rely on foreign sources for raw materials,
other than to the extent U. S. manufacturers acquire their supplies overseas. An
energy crisis or fuel shortage would have no more of an adverse effect on the
Company than on other firms requiring lighting, heat and modest amounts of
electric power for offices and shops.
Among its electro-optical products the Company holds an exclusive license
and foreign patent applications on the Crystallographic Scanner.2
There are little or no seasonal variations in the business, other than
for radiometers which tend to attract greater interest during the spring and
fall seasons.
Working capital is a continuing problem for the Company. There is
currently no working capital financing available through a financial
institution, although producer loans made by Spiral Biotech, Inc. were used to
finance microbiological laboratory instruments' production in prior fiscal
years. The limited availability of working capital results in occasional cash on
delivery orders for materials. All products are guaranteed as to parts and
workmanship for a period of six months to one year. The only warranty work
incurred in the past year was repair of a Model 4000 Autoplate at nominal cost.
The Colony Counter, Autoplate, CrystallographicLaser Scanner and Radiometer products are used principally in the
scientific research and high technology manufacturing communities and therefore
customers tend to be concentrated in these areas of activities.
Sales in July and August 20002001 amounted to $48,835,$1,875, comprising 6 Vacuum
Sources, Autoplate parts inventory and
miscellaneous repair and calibration
services.services for laser scanners. Backlog in this segment at June 30, 20002001 was
$30,400.$1,715.
Business performed for the Government is on a fixed-price basis and
therefore not subject to renegotiation; however, the contracts could be
terminated for non-delivery or failure to meet specifications. There are other
manufacturers of the Company's products, most of them larger and with greater
resources available to fund development and production. Competition is very keen
for the available market. The Company strives to improve its existing products
and produce highly reliable state-of-the-art instruments.
3
2. General Description of BusinessGENERAL DESCRIPTION OF BUSINESS - Research and development by the
-------------------------------
Company in the past affected fourfive products: (1) bacteria colony counters; (2)
four channel radiometers, (3) data processors for bacteria colony counters and,
(4)
Model 500 Crystallographic Scanners. In fiscal year 1992 , the Company,Scanner and (5) in collaboration with Spiral Biotech,
Inc., engaged in development of computer controlled, stepper motor actuated
automation for bacteria colony plating and
counting instruments. The applications comprise coordinated precise motions on
as many as four axes. The purpose of this work was to enhance the technological
excellence and competitive edge of the next generation of the Company's products
for the microbiological laboratory market.plating. This work completed in March, 1992, resulted in a colony counter
with automated features, and a proof-of-concept and demonstration model of a new
spiral plater instrument. Total expenditures for
the spiral plater effort amounted to $63,000 of which $20,000 was funded by
Spiral Biotech, Inc. The preliminaryA more advanced design of the new plating instrument
was completed, and demonstration instruments were produced by a development and manufacturing firm in Holland.
Following the termination of importing of the instrument from Holland, the1995.
The Company, early in 1995, designed a replacement instrument and, concurrent with
development work,1996, began production of Autoplates on an order
from Spiral Biotech, Inc. Follow-on orders for these instruments resulted in
shipments of 282 units prior to June 30, 2000. Spiral Biotech, Inc. advised the
Company that future production of Autoplates will be performed by Advanced
Instruments, Inc., the parent company of Spiral Biotech.
In the electro-optical instruments business, Autoplates, Colony Counterssales of biotechnology
instruments was 12.5% of the total and relatedparts and services for this equipment sales
accounted for 94%65.5% of the year's sales, 2%19% from radiometer sales, 0.8%2.7% from
the MTF, calibration and maintenance, and 3.2%0.3% from miscellaneous sales and
repair work.
For the fiscal year ended June 30, 2000,2001, as has been the case for prior
years, the Company's independent auditors' report has included an explanatory
paragraph, following the opinion paragraph,
3
describing the existence of a going concern uncertainty. Management has been
advised that the principal cause of the going concern uncertainty wasis cash
flow shortage which in prior years caused delays in meeting some current
obligations. It is the opinion of Management that progress in resolving cash
flow related problems, although elusive in past years, was markedly improved
in fiscal years 1999 and 2000. Provided that the
current level inradiometer instrument sales, and
maintenance and repair work continue, Management expects to sustain adequate
cash flow and improve working capital.to enable pursuit of improved business conditions.
The capital expenditures, earnings and competitive position have not
been affected by compliance with Federal, State or local regulations enacted to
control the discharge of materials into the environment or otherwise relating to
the protection of the environment.
Prompted by the many published statements of warning about data management
problems at the turn of the century, the Company carefully examined its internal
data systems for susceptibility to such problems. The current internal data
processing systems service engineering design and quality assurance, shareholder
records and word processing for document preparation. These systems had no
susceptibility to problems relating to year 2000 and beyond. The Company's
principle providers of banking, payroll processing, and materials and parts
provided suitable uninterrupted service throughout the turn of the century
period.
The Company and its subsidiary employ fivetwo persons; twoone are classified
as professional and three asone is semi-professional. The Company did not conduct
operations in foreign countries.
4
ITEM 2. PROPERTIES
The Company, and its wholly-owned subsidiary, Exotech Research &
Analysis, Inc. have been in their present facilities at 8502 Dakota Drive,
Gaithersburg, Maryland 20877 since November, 1987. The premises consist of
approximately 4,500 square feet of office space and laboratory facilities.
In May 1999, the Company entered into a three year lease extension with
McShea Management, Inc. of Gaithersburg, Maryland for the presently occupied
facility.
5Through the efforts of one of the Company's Directors a sub-lease
for about one-half of the leased space was negotiated effective in January 2001,
providing compensation to a level of about 60% of the monthly rent expenses.
This sub-lease continues until the end of the Company's lease.
4
ITEM 3. LEGAL PROCEEDINGS
Neither the company nor its subsidiary are parties to any material
pending legal proceedings nor is any of their property the subject of any
material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during any
quarter of the past fiscal year.
65
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS.
a. Price range of Common Stock
---------------------------PRICE RANGE OF COMMON STOCK
The following table shows the Bid and Ask prices for the Common Stock
in the over-the-counter market for the fiscal years and calendar quarters
indicated, as obtained upon request from stockbrokers in the Washington area.
The quotations represent prices in the over-the counter market between dealers
in securities, do not include retail mark-up, mark-down or commission, and do
not necessarily represent actual transactions. (Transaction data was
insufficient to obtain an average for 19992000 and 2000.2001.)
-------------BIDBID AND ASK PRICES--------------PRICES
------------------
2001 2000 1999
---- ----
FIRST QUARTER Bid, Nominal / Ask, 1/8 Bid, Nominal / Ask, 1/8
SECOND QUARTER Bid, Nominal / Ask, 1/8 Bid, Nominal / Ask, 1/8
THIRD QUARTER Bid, Nominal / Ask, 1/8 Bid, Nominal / Ask, 1/8
FOURTH QUARTER Bid, Nominal / Ask, 1/8 Bid, Nominal / Ask, 1/8
b. Approximate number of Equity Security Holders.
---------------------------------------------APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS.
TITLE OF CLASS: Common Stock
APPROXIMATE NUMBER OF SHAREHOLDERS
(As of September 21, 2000)
APPROXIMATE NUMBER OF SHAREHOLDERS
(As of September 10, 2001) 596
---
c. Dividends.
---------DIVIDENDS.
No dividends were declared or paid during the most recent or any prior
fiscal year.
76
ITEM 6. SELECTED FINANCIAL DATA
Selected Income Statement Data:
------------------------
FISCAL YEAR
----------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Net Sales $132,391 $428,696 $821,158 $499,476 $ 443,176 $ 367,259
Income (Loss) before Taxes
& Extraordinary Credit (82,516) 3,609 31,494 9,878 (265,432)
(152,584)
Net Income (Loss) $(82,516) $ 3,609 $ 31,494 $ 9,878 $(265,432)
$(152,584)
Per Share:
Net Income (Loss) (.09) .00 .03 .01 (.28) (.16)
Selected Balance Sheet Data:
------------------------
FISCAL YEAR
----------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Current Assets $ 258,175 $ 330,336 $ 428,348 $ 375,031 $ 329,315
$ 563,209
Current Liabilities 822,129 812,543 913,889 896,328 856,445
825,952
Working Capital (563,954) (482,207) (485,541) (521,297) (527,130)
(262,743)
Total Assets 263,751 336,681 434,418 385,363 335,602 570,541
Stockholders' Equity
and Accumulated
Deficit $(558,378) $(475,862) $(479,471) $(510,965) $(520,843) $(255,411)
87
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS.
The Company's revenues of $428,696$132,391 were 48%69% lower than in fiscal year
1999,2000, and 14%84% lower than in fiscal year 1998.1999. The decline in the past year
related in large part to organizational and personnel disruptions in the
Company's principal customer and marketing agent for biotechnology instruments,
Spiral Biotech, Inc. The increase in 1999 was largely attributable to new
ownership of Spiral Biotech, Inc., resulting in an order for substantially
larger quantity of instruments.
Sales of instruments, parts, repairs and calibration services in the
past three years are shown in the following table. Instrument sales peaked in
the
priorfiscal year 1999 with the increase related to a large order for the automated
plater. TheIn year 2000 the sales of miscellaneous service, parts and repairs
doubled over fiscal year 1999 results reflecting a shift in priorities by the management
of the Company's principal customer in this period.
2001 2000 1999 1998
-------- -------- --------
Biotechnology Instruments $16,550 $338,170 $736,467 $411,273
Radiometer 25,091 10,060 40,504 22,555
MTF Tester Service 3,625 3,500 6,100 10,550
Miscellaneous Parts and Service 87,125 76,966 38,087
55,098
The cost of operations, $392,782,$147,170, resulted in an operating incomeloss of
$35,914,$14,779, compared to fiscal year 19992000 income of $67,032$35,914 and operating income of
$50,819$67,032 in fiscal year 1998.1999. The impacteffects of miscellaneous income of $30,604,
interest costscost of $34,594 and write-down of $63,747 of inventory, resulted in a
net profitloss of $3,609$82,516, compared to a net profit of $3,609, a net profit of $31,494
in 2000 and $9,878 in 1999, and
1998, respectively.
Sales of the Model 100BX radiometer was limited to one instrumentthree instruments
pending following the recent completion of a new lot of 25 units. Management recognizes
a continuing demand for this instrument which deserves attention. A Web site was
implemented to market this product on the Internet. The radiometer enjoys a
long-standing reputation for value in the remote sensing field and efforts have
beenwere
renewed to increase sales.
In the past year, orders for instruments decreased by 54%95% and services
related to biotechnology products increased by 100%13% relative to the level of the
prior year. The inventory of finished goods of Autoplates and Vacuum Sources
was at the level targeted by Spiral Biotech Inc. (SBI) early in the third
quarter of the past fiscal year. This condition had been anticipated and the Company was advised by
SBI that further manufacturing of Autoplates would be done by SBI's parent
company, Advanced Instruments Inc.. Planning was undertaken collaboratively in
November 1999 by Exotech and Spiral Biotech for the Company to be the provider
of all parts and services for biotechnology products and also to provide
specifically assigned design and development services for next-generation
products. Planning progressed toward full implementation of these objectives,
including the co-location of SBI's Maryland office with Exotech, through early
April 2000 when the Company's Chief Executive Officer and designated principal
designer of instrumentation suffered a heart attack. This event stalled further
implementation for a period of five weeks, and resulted in a revision of SBI
plans, whereby theplans. The Company was requested to provide further technology transfer
instructions and services until such time as all Spiral Biotech activities and
related services could be relocated to the facilities of the parent company in
Norwood, Massachusetts. Explorations and negotiations continuecontinued with Spiral
Biotech to find mutually
8
beneficial relationships and 9
activities that willwould go on through the next fiscal
year.
Despite financial and staffing limitations that have impeded marketing of
the Crystallographic Scanner instruments, Management believes that the results
of on-going collaborative studies and demonstrations of capabilities will
improve the prospects of sales to the potential customers who continue to show
interest in that instrument system. Furthermore, Management is committed to
explore the prospects for collaborative arrangements with several well
established suppliers of manufacturing equipment to the semiconductor industry
as a means to generate increased exposure and sales potential for this product.
Substantive results from this effort were not achieved prior to June 30, 2000.
Over the pastprior three fiscal years, as in priorearlier years, the independent
accountants' report has included an explanatory paragraph, following the opinion
paragraph, describing the existence of a going concern uncertainty. The
accountants advised Management that the principal cause for the going concern
uncertainty is cash flow shortages which have caused delays in meeting current
obligations. In the opinion of Management, the recent threecash flow conditions improved in
fiscal years of improved
markets for the Company's products allowed substantial2000 and 1999, however no progress toward overcoming the
qualification stated by the accountants.accountants occurred in the most recent year.
Continued stringent control of costs and cash outlays has enabled the Company to
sustain high
qualitytimelines in meeting financial obligations with the exception of
interest payments to four note holders, comprised of former Directors, Officer
and timely upgrades of its products while seeking improved results from
marketing efforts in a very competitive environment. The challengethe present Chief Executive Officer. Emphasis is now being addressed in contract negotiations, marketing efforts andgiven to
explorations of other business opportunities, isincluding merger or sale that will
improve the Company's worth to provide ample resources to support operations and
growth throughout the coming fiscal year.its shareholders.
As shown in the Statements Of Cash Flows for the three years ended June
30 of 2001, 2000 1999 and 1998,1999, each period ended with a small positive cash balance.
Negative cash flow from operations have beenwas experienced in twoboth of the past
threelatest fiscal
years. In fiscal year 1999, a net profit of $31,494 was offset by substantial
increases in accounts receivable, accounts payable and other accrued expenses,
and a decrease in inventories. The result of small operating profitsprofit in 2000 and 1998
caused negative cash flow from operating transactions of ($9,750) and ($18,378) respectively.. Offsetting in
these cases were net proceeds from notes of $26,479$7,903 in 19982001 and $4,151 in 2000.
The Company managed to meet its cash flow obligations in the past year with
receipts from sales and financing activities comprised of deposits, received with purchase ordersloans, sales
of fully depreciated equipment and furnishings and waiver of compensation by the
Company's Chief Executive Officer.
A careful examination by Management, prompted by well-publicized risks of
year 2000 anomalies with some computer operating systems and programs, resulted
in safeguards that kept the company's data processing and record-keeping systems
from suffering such difficulties.
It is noted that the Company's property, plant and equipment are nearly
fully depreciated. However, all essential items of these assets are maintained
in good repair and no significant replacements nor additions are anticipated in
the next year or more.
The Company's management and employees continuecontinues to be committed to reestablishing progress toward our goal of profitability.
10establishing profitable
resolution to its current situation.
9
Linton, Shafer & Company, P.A.
Certified Public Accountants
932 Hungerford Drive, Suite 13
Rockville, MD 20850
301-340-0084
Principals: Corrine M.Bradac, CPA
Kevin R. Hessler, CPA
Donald C. Linton, CPA, CFP
Joseph M. McCathran, CPA
Michele R. Mills, CPA
Ronald W. Shafer, CPA
Report of Independent Certified Public AccountantsREPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
Exotech, Incorporated and Subsidiary
We have audited the accompanying consolidated balance sheet of Exotech,
Incorporated and Subsidiary as of June 30, 20002001 and 19992000 and the consolidated
income statement of operations and cash flows for the years ended June 30, 2001, 2000
1999 and 1998.1999. These reports and related schedules are included on pages 1211 through
2120 of the annual report on Form 10-K of Exotech, Incorporated and Subsidiary.
These financial statements and related schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and related schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Exotech, Incorporated and Subsidiary as of June 30, 20002001 and 19992000 and the
results of their operations and their cash flows for the years ended June 30,
2001, 2000 1999
and 1998,1999, in conformity with generally accepted accounting
principles.
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, there is substantial doubt about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
September 20, 20004, 2001
/s/ LINTON, SHAFER & COMPANY, P.A.
1110
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE YEARS ENDED JUNE 30
Reference is made to Note 1 of the Notes to the Consolidated Financial
Statements for a description of operations of the Company and to Note 2 for a
description of the principal accounting policies followed by the Company.
2000 1999 1998
---- ---- ----
REVENUES
- --------
Instrument Sales $348,230 $776,971 $433,828
Parts, Repairs and Services 80,466 44,187 65,648
-------- -------- --------
TOTAL SALES $428,696 $821,158 $499,476
COST OF OPERATIONS
- ------------------
Direct Cost and Overhead
Instrument Sales 288,044 646,114 362,084
Repairs, Parts and Service 68,921 24,549 37,596
Inventory Adjustment -- 34,188 --
General and Administrative
Instrument Sales 25,538 47,243 44,615
Repairs, Parts and Service 10,279 2,032 4,362
-------- -------- --------
TOTAL COST OF OPERATIONS 392,782 754,126 448,657
-------- -------- --------
OPERATING PROFIT (LOSS) 35,914 67,032 50,819
- -----------------------
OTHER REVENUES (EXPENSES)
- -------------------------
Miscellaneous 776 741 588
Interest (33,081) (36,279) (41,529)
-------- -------- --------
NET PROFIT (LOSS) BEFORE TAXES 3,609 31,494 9,878
- ------------------------------
INCOME TAXES -- -- --
-------- -------- --------
NET PROFIT (LOSS) $ 3,609 $ 31,494 $ 9,878
- ----------------- ======== ======== ========
2001 2000 1999
----- ----- -----
REVENUES
--------
Instrument Sales $ 41,641 $348,230 $776,971
Parts, Repairs and Services 90,750 80,466 44,187
--------- --------- ---------
TOTAL SALES $132,391 $428,696 $821,158
COST OF OPERATIONS
------------------
Direct Cost and Overhead
Instrument Sales 34,583 288,044 646,114
Repairs, Parts and Service 75,367 68,921 24,549
Inventory Adjustment -- -- 34.188
General and Administrative
Instrument Sales 11,707 25,538 47,243
Repairs, Parts and Service 25,513 10,279 2,032
--------- --------- ---------
TOTAL COST OF OPERATIONS 147,170 392,782 754,126
--------- --------- ---------
OPERATING PROFIT (LOSS) (14,779) 35,914 67,032
-----------------------
OTHER REVENUES (EXPENSES)
-------------------------
Miscellaneous 30,604 776 741
Interest (34,594) (33,081) (36,279)
Inventory Write-off (63,747) --------- ---------
---------
NET PROFIT (LOSS) BEFORE TAXES (82,516) 3,609 31,494
------------------------------
INCOME TAXES -- -- --
--------- --------- ---------
NET PROFIT (LOSS) ($ 82,516) $ 3,609 $ 31,494
----------------- ========= ========= =========
Gain or (Loss) per Common Share (.09) .00 .03 .01
Weighted average number of
common shares outstanding 942,387 942,387 942,387
The accompanying notes are an integral part of these statements.
11
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30
2001 2000
------ ------
CURRENT ASSETS
Cash $ 1,329 $ 1,921
Accounts Receivable
(Note 2) Billed 13,615 12,633
Less: Allowance for Doubtful Account -- --
Inventories, at lower of
average cost or market 243,482 313,842
Prepaid Expenses and Advances (251) 1,940
--------- ---------
TOTAL CURRENT ASSETS 258,175 330,336
PROPERTY, PLANT AND EQUIPMENT,
at cost
Laboratory Equipment 146,880 160,980
Office Furniture & Equipment 73,392 73,393
--------- ---------
220,272 234,373
Less accumulated
depreciation and
amortization (218,576) (232,108)
--------- ---------
Total Property, Plant and Equipment - Net 1,696 2,265
OTHER ASSETS
Miscellaneous 3,880 4,080
-------- --------
TOTAL ASSETS $263,751 $336,681
======== ========
The accompanying Notes are an integral part of these statements.
12
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30
2001 2000 1999
---- ----
CURRENT ASSETS
Cash $ 1,921 $ 8,868LIABILITIES
Notes Payable and Current
Maturities of Long Term
Debt (Note 5) $411,126 $403,223
Accounts Receivable
(Note 2) Billed 12,633 85,270
Less: Allowance for Doubtful Account -- --
Inventories, at lower of
average cost or market 313,842 331,135
Prepaid ExpensesPayable and Advances 1,940 3,075
---------Other
Accrued Liabilities 10,391 13,053
Accrued Payroll and Employee
Benefits 12,240 45,016
Accrued Officer Salary and
Benefits 140,071 140,072
Accrued Interest 244,036 209,779
Deferred Revenue 4,265 1,400
---------- ---------
TOTAL CURRENT ASSETS 330,336 428,348
PROPERTY, PLANT AND EQUIPMENT,LIABILITIES 822,129 812,543
SHAREHOLDERS' DEFICIT
Common Stock, par value $.10 per share;
1,500,000 shares authorized;
970,135 shares issued;
942,387 shares outstanding 97,014 97,014
Paid in Surplus 1,169,645 1,169,645
Accumulated Deficit (1,712,617) (1,630,101)
Treasury Stock 27,748 shares at cost Laboratory Equipment 160,980 160,980
Office Furniture & Equipment 73,393 72,245
--------- ---------
234,373 233,225
Less accumulated
depreciation and
amortization (232,108) (231,498)
--------- ---------
Total Property, Plant and Equipment - Net 2,265 1,727
OTHER ASSETS
Miscellaneous 4,080 4,343
---------(112,420) (112,420)
---------- ---------
TOTAL ASSETSSHAREHOLDERS' DEFICIT (558,378) (475,862)
---------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT $ 263,751 $ 336,681
$ 434,418
--------- ---------========== =========
The accompanying Notes are an integral part of these statements.
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30
2000 1999
---- ----
CURRENT LIABILITIES
Notes Payable and Current
Maturities of Long Term
Debt (Note 5) $ 403,223 $ 399,072
Accounts Payable and Other
Accrued Liabilities 13,053 20,099
Accrued Payroll and Employee
Benefits 45,016 67,501
Accrued Officer Salary and
Benefits 140,072 169,730
Accrued Interest 209,779 176,587
Deferred Revenue 1,400 80,900
----------- -----------
TOTAL CURRENT LIABILITIES 812,543 913,889
SHAREHOLDERS' DEFICIT
Common Stock, par value $.10 per share;
1,500,000 shares authorized;
970,135 shares issued;
942,387 shares outstanding 97,014 97,014
Paid in Surplus 1,169,645 1,169,645
Accumulated Deficit (1,630,101) (1,633,710)
Treasury Stock 27,748 shares at cost (112,420) (112,420)
----------- -----------
TOTAL SHAREHOLDERS' DEFICIT (475,862) (479,471)
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT $ 336,681 $ 434,418
=========== ===========
The accompanying Notes are an integral part of these statements.
1413
EXOTECH INCORPORATED AND SUBSIDIARY CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE THREE YEARS ENDED JUNE 30
INCREASE (DECREASE) IN CASH 2001 2000 1999 1998
-
--------------------------- ---- ---- ----
CASH FLOWS FROM OPERATING TRANSACTIONS
- --------------------------------------
Net Profit (Loss): $(82,516) $ 3,609 $ 31,494 $ 9,878
Add: Non Cash Income Determinants
Depreciation & Amortization 569 1,073 1,073 1,045
Add (Deduct): Changes in Current Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (982) 72,637 (51,358) (15,687)
(Increase) Decrease in Prepaid Expenses & Advances 2,191 1,135 (2,460) (615)
(Increase) Decrease in Inventories 70,360 17,293 2,927 (26,403)
Increase (Decrease) in Accounts Payable & Other Accrued Liabilities (2,662) (7,046) (66,924) (12,345)
Increase (Decrease) in Accrued Payroll & Related Expenses (32,777) (52,143) (15,188) (7,284)
Increase (Decrease) in Accrued Interest 34,257 33,192 31,475
33,033
Deferred Revenue 2,865 (79,500) 80,900 --
-------- -------- --------
Cash Provided By (Used In)PROVIDED BY (USED IN) Operating Transactions $ (8,695) $ (9,750) $ 11,939 $(18,378)
----------- --------
-------- -------- --------
CASH FLOWS FROM FINANCING TRANSACTIONS:
- ---------------------------------------
Proceeds from Notes 20,271 18,000 22,195 75,306
Payment on Notes (12,368) (13,849) (34,898) (48,827)
-------- -------- --------
Cash Provided By (Used In)PROVIDED BY (USED IN) Financing Transactions 7,903 4,151 (12,703) 26,479
----------- -------
-------- -------- --------
CASH FLOWS FROM INVESTING TRANSACTIONS:
- ---------------------------------------
Purchase of Equipment -- (1,148) (1,695)
(5,090)
Deposits 200 (200) 4,885 --
-------- -------- --------
Cash Provided By (Used In)PROVIDED BY (USED IN) Investing Transactions 200 (1,348) 3,190 (5,090)
----------- -------
-------- -------- --------
INCREASE (DECREASE) IN CASH (592) (6,947) 2,426 3,011
CASH BALANCE - BEGINNING 1,921 8,868 6,442 3,431
-------- -------- --------
CASH BALANCE - ENDING $ 1,329 $ 1,921 $ 8,868 $ 6,442
======== ======== ========
SUPPLEMENTAL INFORMATION
- ------------------------
Interest Paid $ 338 $ 12 $ 4,804 $ 8,496
Taxes -- -- --
The accompanying notes are an integral part of these statements.
1514
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
FOR THE THREE YEARS ENDED JUNE 30, 20002001
Common Stock
---------------------COMMON STOCK
------------------------ TREASURY STOCK
($0.10) Paid-In Accumulated Treasury Stock
------------------------
Shares Par Value Surplus (Deficit) Shares CostPAID-IN ACCUMULATED -----------------------
SHARES PAR VALUE SURPLUS (DEFICIT) SHARES COST
------ --------- ------- --------- ------ ----
Balance, June 30, 1997 970,135 $97,014 $1,169,645 $(1,675,082) 27,748 $(112,420)
Add (Deduct) -- -- -- -- -- --
Net Profit (Loss) -- -- -- 9,878 -- --
------- ------- ---------- ----------- ------ ---------
Balance, June 30, 1998 970,135 $97,014 $1,169,645$ 97,014 $ 1,169,645 $(1,665,204) 27,748 $(112,420)$ (112,420)
Add (Deduct) -- -- -- -- -- --
Net Profit (Loss) -- -- -- 31,494 -- --
------- ------- ---------- ----------- ------ -------------------- ----------- ----------- ----------- -----------
Balance, June 30, 1999 970,135 $97,014 $1,169,645$ 97,014 $ 1,169,645 $(1,633,710) 27,748 $(112,420)
------- ------- ---------- ----------- ------ ---------$ (112,420)
Add (Deduct) -- -- -- -- -- --
Net Profit (Loss) -- -- -- 3,609 -- --
------- ------- ---------- ----------- ------ -------------------- ----------- ----------- ----------- -----------
Balance, June 30, 2000 970,135 $97,014 $1,169,645$ 97,014 $ 1,169,645 $(1,630,101) 27,748 $(112,420)
======= ======= ==========$ (112,420)
----------- ----------- ----------- ----------- ----------- -----------
Add (Deduct) -- -- -- -- -- --
Net Profit (Loss) -- -- -- (82,516) -- --
----------- ----------- ----------- ----------- ----------- -----------
Balance, June 30, 2001 970,135 $ 97,014 $ 1,169,645 $(1,712,617) 27,748 $ (112,420)
=========== ====== ==================== =========== =========== =========== ===========
The accompanying notes are an integral part of these statements.
1615
EXOTECH INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) DISCUSSION OF OPERATIONS AND REALIZATION OF ASSETS
For the fiscal year ended June 30, 2000,2001, the Company had an operating profitloss of
$35,914.$14,779. Operating profit was $67,032$35,914 in the prior year after a year-end write-
off of $34,188 in manufacturing inventory.year. The Company had an
operating profit of $50,819$67,032 in the fiscal year ended June 30, 1998.1999. At June 30,
2000,2001, all accounts payable were less than 30 days old.
The accompanying financial statements have been prepared on the "going concern"
basis of generally accepted accounting principles. The ability of the Company to
continue normal operations is dependent upon its ability to obtain the required
amounts of working capital to finance the existing contracts, to continue the
acquisition of additional contracts, and to pursue instrument sales at prices
sufficient to recover costs and some profits. Management believes that revenues
now being experienced, together with stringent control of costs and cash outlays
will provide sufficient cash to support its operations throughout the on-going
negotiations for new business arrangments for the current fiscal year.
Crystallographic Scanners have experienced no sales activity since approximately
seven years ago. Efforts are ongoing to develop a marketing agreement with an
established marketer of capital equipment to the crystal growers and processors,
or alternatively to sell the products, design package, software, patents and
licenses to larger manufacturers of instruments with a significant presence in
the semiconductor processing equipment market. However, substantive results were
not achieved prior to June 30, 2000. In the fiscal year ended June 30, 1997 this
product line was deleted from inventory.
At June 30, 2000,2001, the remaining value (backlog) of existing sales contracts was
approximately $30,400.$1,715
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
- ------------------NATURE OF BUSINESS
The Company is a manufacturer of Electro-optical instruments. It performs the
research and development required for those products.
Principle of Consolidation
- --------------------------PRINCIPLE OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiary, after elimination of all significant intercompany
transactions.
Revenue Accounting
- ------------------REVENUE ACCOUNTING
The Company records revenue earned based on shipments of units of its products.
Inventory
- ---------INVENTORY
Finished goods inventory is stated on the basis of the lower of average cost or
market value.
Depreciation and Amortization
- -----------------------------DEPRECIATION AND AMORTIZATION
The Company uses a straight-line method of depreciation and amortization for
both tax and financial reporting purposes. The following time periods are used:
1716
DEPRECIATION:
Laboratory equipment 5 or 8 years
Office furniture and equipment 5 years
AMORTIZATION:
Leasehold improvements Life of lease
Patents 12 years
Depreciation expense recorded in the consolidated statement of operations is as
follows: 1998 - $1,045, 1999 - $1,073, including amortization of patents at the rate of $928 in
1998 and 1999, and $1,073 in fiscal year 2000 of which $610 representsis depreciation and $463 representsis
amortization. For fiscal year 2001 depreciation totaled $569; there was no
amortization. The Company's limit for capitalization of property and equipment
is $500 or more.
Income Taxes
- ------------INCOME TAXES
Provisions for income taxes are based on pre-tax income reported in the
financial statements, using the guidance of Financial Accounting Standards Board
Statement No. 109 (FAS #109) "Accounting for Income Taxes." Differences between
income (loss) for financial reporting purposes and tax reporting arise from (a)
the capitalization and amortization of research and development costs for income
tax reporting purposes, but deducting these costs as expenses in the period
incurred for financial statement purposes; and (b) timing differences in
deducting net losses on contracts. There were no provisions for income taxes
required in the three year period ended June 30, 20002001 due to the operating
losses and loss carryforwards for each of those years.
At June 30, 2000,2001, the Company had net operating loss carryforwards of $664,734$760,150
which begin to expire in 2000.2001. The Company also has incurred research and
experimental expenses of $183,368 in prior years that have been capitalized to
be amortized over a sixty month period for income tax purposes, but have been
expensed in the period incurred for financial statement reporting. While the
accounting standard allows companies to recognize a deferred tax asset on the
tax effect of these timing differences, the Company has provided a valuation
allowance for the full amount since it is more likely than not the deferred tax
asset will not be realized.
The approximate tax effect of the carryforward and temporary difference for
the three years ended June 30 consist of:
2000 1999 1998
--------- --------- ---------
Net operating loss carryforward 265,894 $ 264,550 $ 269,993
Deferred research and
experimental expenses 5,160 15,480 25,800
Less: Valuation allowance (271,054) (280,030) (295,793)
--------- --------- ---------
Deferred Tax Asset - net - 0 - - 0 - - 0 -
========= ========= =========
Net (increase) decrease in
valuation allowance $ (8,976) $ 15,763 $ 3,951
========= ========= =========
18
2001 2000 1999
---- ---- ----
Net operating loss carryforward $ 304,060 $ 265,894 $ 264,550
Deferred research and
experimental expenses 0 5,160 15,480
Less: Valuation allowance (304,060) (271,054) (280,030)
---------- ---------- ----------
Deferred Tax Asset - net - 0 - - 0 - - 0 -
========== ========== ==========
Net (increase) decrease in
valuation allowance $ 33,006 $ (8,976) $ 15,763
========== ========== ==========
17
Following is a table reconciling the Company's accounting net loss or (income)
for each of the last three years ended June 30.
2000 1999 1998
-------- -------- -------
Accounting Net (Income) Loss $ (3,609) $(31,494) $(9,878)
Nondeductible expense -- -- --
Research and experimental costs:
Capitalized on tax return -- -- --
Tax amortization 25,800 25,800 25,800
-------- -------- -------
Taxable Net (Income) Loss $22,191 $ (5,694) $15,922
2001 2000 1999
---- ---- ----
Accounting Net (Income) Loss $82,516 $(3,609) $(31,494)
Nondeductible expense -- -- --
Research and experimental costs:
Capitalized on tax return -- -- --
Tax amortization 12,900 25,800 25,800
------- ------- --------
Taxable Net (Income) Loss $95,416 $22,191 $ (5,694)
======= ======= ========
======== =======
Repairs and Betterments
- -----------------------
REPAIRS AND BETTERMENTS
Repairs are expensed as incurred. Betterments are capitalized and depreciated
over the remaining useful life of the assets.
Accounts Receivable
- -------------------ACCOUNTS RECEIVABLE
Accounts receivable consist of amounts billed from sales as of June 30, 20002001 and
1999.2000. There is no allowance for doubtful accounts as of June 30, 2000,2001, as the
Company considers accounts receivable to be fully collectible.
Cash And Cash Equivalents
- -------------------------CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Use of Estimates
- ----------------USE OF ESTIMATES
In preparing financial statements in conformity with generally accepted
accounting principles, Management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(3) INVENTORY
Inventories are summarized as follows:
2000 1999
-------- --------
Raw Materials $ 32,625 $ 32,625
Goods in Process 267,217 284,510
2001 2000
---- ----
Raw Materials $ 32,625 $ 32,625
Goods in Process 196,857 267,517
Finished Goods 14,000 14,000
-------- --------
$243,482 $313,842
$331,135
(4) RESEARCH AND DEVELOPMENT COSTS
The Company's accounting policy is to write off research and development costs
as incurred. There were no R&D costs in the fiscal year 1998, 1999, 2000 nor in 2000.
192001.
18
(5) NOTES PAYABLE
Notes payable at June 30, 2000,2001, consist of three demand notes of $100,000,
$8,000 and $47,000 with interest at 8.5% per annum to three of the Company's
former directors. In addition, Notes amounting to $248,223$256,126 are payable with
interest at 8.5% per annum to one officer/employee.
2001 2000 1999
---- ----
Average* aggregate amount outstanding during year $402,993 $387,141 $410,093
Maximum amount outstanding during year 411,126 403,223 429,273
Average* interest rate on loans
outstanding at end of year 8.50% 8.50%
Average* interest rate incurred
during the period 8.50% 8.50%
Average* interest rate incurred
during the period 8.50% 7.80%
*Average amounts outstanding during the year and related average interest rates
were determined from the average of the month-end amounts outstanding. The
average interest rate at each year-end was determined from the weighted average
of amounts outstanding at that time.
(6) COMMITMENTS AND CONTINGENCIES
The Company received cash deposits from its principal customersubtenant of $158,900$2,100 as security on
orders for instruments and technical services amounting to $598,000. The balance
of this liability atthe sublease. At June 30, 2000 was $1,400 which will be reduced
incrementally upon discounted billing for delivered parts and services. At2001, the endtenant had paid rent of August 2000,$2,165 in advance.
This temporarily raised the balance of the liability remained at $1,400.to $4,265.
All operations of the Company and subsidiary were conducted in leased
facilities. In March 1990, the Company entered into a lease agreement for a
three-year period for the present facilities at 8502 Dakota Drive, Gaithersburg,
MD. This lease was renegotiated and extended in three year increments through
May 31, 2002.
Non-Financing 2002 2001
------
------
Building $30,873
$32,781
(7) EARNINGS PER SHARE
Per share computations were based on the weighted average number of shares
outstanding during the periods, excluding options because the market price and
option price were the same.
(8) SUPPLEMENTAL PROFIT AND LOSS INFORMATION
Description
DESCRIPTION 2001 2000 1999 1998
-
----------- ---- ---- ----
Taxes other than income:
Payroll $ 3,305 $ 9,125 $11,299 $ 8,938
Franchise, Personal Property and
other Miscellaneous 1,407 880 873 1,587
Rents, including equipment rental 29,156 42,634 42,318
41,573
20
19
(9) DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No disagreements exist between Management and its independent public accounting
firm.
(10) TRANSACTIONS WITH SHAREHOLDERS
Sales to a company owned by a shareholder aggregated $-0-,$-0-, and $87,361
(about -0, -0- and $457,018
(about 0, 11 and 91 percent, respectively, of total sales) for the fiscal
years ended June 30, 2001, 2000 and 1999, and 1998, respectively. Amount due from such sales at
June 30, 1998 was $23,042. There was nothing due from such sales after October
1998. Sales were consummated
on terms similar to those prevailing with unaffiliated customers.
(11) VALUATION AND QUALIFYING ACCOUNTS
The following is a schedule of Valuation and Qualifying Accounts:
Additions:
Balance Charged to Balance
Beginning Costs and End of
Description of Period Expenses Deductions Period
----------- --------- -------- ---------- ------
Additions:
Balance Charged to Balance
Beginning Costs and End of
Description of Period Expenses Deductions Period
----------- --------- --------- ----------- --------
Allowance for Depreciation:
Year Ended June 30, 2001 232,108 569 14,101 218,576
Year Ended June 30, 2000 231,498 610 -- 232,108
Year Ended June 30, 1999 231,354 144 -- 231,498
Year Ended June 30, 1998 231,236 118 -- 231,354
Allowance for Amortization
of Patents:
Year Ended June 30, 2001 11,134 -- 11,134 --
Year Ended June 30, 2000 10,671 463 -- 11,134
Year Ended June 30, 1999 9,743 928 -- 10,671
Year Ended June 30, 1998 8,815 928 -- 9,743
21
20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
(a), (b), (e)
NAME: ROBERT G. LYLE (71)
President, CEO of the Company and subsidiary; Director.
Business experience
during past 5 years: Same as above, since 1977.
Other Positions: None.
Other Directorships: None.
______________________
NAME: THEODORE J. PARRECO (43)
Secretary (1999-2000) and Director and Member of Audit
Committee (1999-2000).
Business experience
during past 5 years: - President and Treasurer, James Parreco & Son Inc.
Construction Equipment Leasing (1990-present)
- Vice President, Indcom Land Inc. (1994-present)
Other Positions: None.
Other Directorships: None.
______________________
NAME: JOHN M. TALBOT (44)
Treasurer (1999), Secretary (1997-1999) and Director
and Member of Audit Committee (1997-2000).
Business experience
during past 5 years: - Senior Electronic Engineering Technician and Data
Processing Supervisor (1987-2000)
NAME: ROBERT G. LYLE (72)
President, CEO of the Company and
subsidiary; Director.
Business experience
during past 5 years: Same as above, since 1977.
Other Positions: None.
Other Directorships: None.
-------------------------
NAME: THEODORE J. PARRECO (44)
Secretary (1999-2001) and Director and
Member of Audit Committee (1999-2001).
Business experience
during past 5 years: - President and Treasurer, James Parreco & Son Inc.
Construction Equipment Leasing (1990-present)
- Vice President, Indcom Land Inc. (1994-present)
Other Positions: None.
Other Directorships: None.
-------------------------
NAME: JOHN M. TALBOT (45)
Treasurer (1999), Secretary (1997-1999) and
Director and Member of Audit Committee
(1997-2001).
Business experience
during past 5 years: - Senior Electronic Engineering Technician and Data Processing
Supervisor (1987-2001). Electronic Technician and Computer
Programmer (1979-1987)
Other Positions: None.
Other Directorships: None.
______________________
-------------------------
Note: All terms expire in December, 20002001
c. Not applicable.
d. There are no family relationships between any of the above listed
directors and any other director or executive officer of the Company.
f. None of the directors or executive officers have been subject to any
bankruptcy or insolvency proceedings, criminal proceedings, or injunctions
against dealing in investments during the past three years.
2221
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
A. No individual in Management received remuneration of
$100,000 or more. Officers as a group of three people
received no payments except for $10,166$2,020 in disbursements
for the group health and life insurance premiums for the
Chief Executive Officer. The total compensation for the
Chief Executive Officer in fiscal year 20002001 was $10,166.$2,020.
Mr. Talbot was elected to be Secretary and Director
subsequent to June 30, 1997 at no added compensation over
his salary as a full-time employee.
B. No annuity, pension or retirement benefits are proposed to
be paid to any director or officer in the event of his
retirement. No remuneration payments are proposed to be
made in the future, directly or indirectly, to any
director or officer by the Company or its subsidiary
pursuant to any existing plan or arrangement.
C. There are no fees paid to directors for services in that
capacity.
D. No officer, or director of the Company: (1) received
options during the reporting period; or (2) exercised
options during the reporting period, or (3) held options
as of September 1, 2000.2001. The officers and directors of the
Company as a group did not: (1) receive options during the
reporting period, or (2) exercise options during the
reporting period, or (3) hold options as of September 1,
2000.2001.
E. Termination of employment - the Company has no employment
termination agreements with officers or employees.
2322
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 21, 2000,14, 2001, the information with
respect to common stock ownership of each person known by the Company to own
beneficially more than 5% of the shares of the Company's common stock, par value
$0.10 per share, and of all officers and directors as a group:
AMOUNT AND NATURE OF %
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
-
---------------- -------------------- -----
Carter C. Chinnis Of Record 90,244
303 N. Vine Street Beneficially 1,200
-----
Richmond, VA 23220 Total 91,444 9.70
Robert G. Lyle Of Record 160,318 17.01
41957 Brightwood Lane
Leesburg, VA 22075
Theodore Parreco Of Record 44,100
PO Box 1357 Benefically 5,126 -----
Carter C. Chinnis Of Record 90,244
303 N. Vine Street Beneficially 1,200
-------
Richmond, VA 23220 Total 91,444 9.70
Robert G. Lyle Of Record 160,318 17.01
41957 Brightwood Lane
Leesburg, VA 22075
Theodore Parreco Of Record 44,100
PO Box 1357 Benefically 5,126
-------
Upper Marlboro, MD 20773 Total 49,226 6.27
Denzil C. Pauli Of Record 204,547 21.70
13021 Bluhill Road
Aspen Hill, MD 20906
William T. Stephens Of Record 96,449 10.23
PO Box 1096
McLean, VA 22075
Current officers and directors as a group own a total of 209,544, representing
22.24% of Common Stock.
2423
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
a. Transactions with Management and others. The Company was
not a party to material transactions since the beginning
of its last fiscal year in which a holder of 5% of the
securities of the Company had or has a direct or indirect
material interest.
b. Certain Business relationships. None of the Company's
directors, executive officers, or nominees for director
have a working relationship with any of the Company's
vendors, customers or sources of working capital that
would be sizeable enough to generate a conflict of
interest or undue influence, to the best knowledge of
Management. William T. Stephens, is the Company's legal
counsel; however, revenue generated by services rendered
to the Company do not exceed 1% of that law firm's
revenues.
c. Indebtedness of Management. No director or officer of the
Company or any associate of any director or officer were
indebted to the Company.
2524
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
FORM 8-K
A. 1. LIST OF FINANCIAL STATEMENTS IN PART II OF THIS REPORT.
PAGE NO.
--------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.................... 11
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THREE YEARS
ENDED JUNE 30, 2000.................................................. 12
CONSOLIDATED BALANCE SHEETS - JUNE 30, 2000 AND 1999.................. 13-14
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
YEARS ENDED JUNE 30, 2000............................................ 15
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
DEFICIT - FOR THE THREE YEARS ENDED JUNE 30, 2000.................... 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................ 17-21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT....................................................... 24
FINANCIAL DATA SCHEDULE (EX-27)....................................... 29
PAGE NO.
--------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...................................................... 10
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THREE YEARS
ENDED JUNE 30, 2001.................................................................................... 11
CONSOLIDATED BALANCE SHEETS - JUNE 30, 2001 AND 2000.................................................... 12-13
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
YEARS ENDED JUNE 30, 2001.............................................................................. 14
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
DEFICIT - FOR THE THREE YEARS ENDED JUNE 30, 2001...................................................... 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.............................................................. 16-20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT......................................................................................... 23
Schedules other than those listed above are omitted for the reason that they are
not required or are not applicable, or the required information is shown in the
financial statements or notes thereto.
Columns omitted from schedules filed have been omitted because the information
is not applicable.
Individual financial statements of the Company are omitted because it is
primarily an operating company and the subsidiary included in the consolidated
financial statements being filed in the aggregate does not have minority equity
interests and/or indebtedness to any person other than the parent in the amounts
which together exceed 5% of the total consolidated assets at the date of the
latest balance sheet filed excepting indebtedness incurred in the ordinary
course of business which is not overdue and which matures within one year of its
creation, whether evidenced by securities or not, and indebtedness which is
collateralized by the parent by guarantee, pledge, assignment or otherwise.
A. 2. PARENT AND SUBSIDIARY
The Company has no parent. The subsidiary of the Company is:
NAME: EXOTECH RESEARCH & ANALYSIS, INC.
STATE OF INCORPORATION: DELAWARE
SECURITIES OWNED BY THE COMPANY: COMMON STOCK, 100%
The foregoing is included in the consolidated statements of the Company
and subsidiary.
2625
A. 3. EXHIBITS
3.1 Restated Certificate of Incorporation of the Company which is hereby
identified as a BASIC DOCUMENT. The document was originally filed pursuant to a
Registration Statement (Form S-1) filed on November 8, 1968, and is incorporated
herein by reference.
3.2 By-Laws of the Company as revised amended on April 16, 1971, which is hereby
identified as a BASIC DOCUMENT. The document has been filed pursuant to FORM
10-
K10-K for the fiscal year ended June 30, 1971, and is incorporated herein by
reference.
3.4 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION - EXOTECH SYSTEMS,
INC. changing its name to EXOTECH RESEARCH AND ANALYSIS, INC. certified by the
Secretary of the State of Delaware on the 12th day of August 1975, which is
identified as a BASIC DOCUMENT. The document was originally filed with the Form
10-K for the fiscal year ended June 30, 1976, and is incorporated herein by
reference.
3.5 CERTIFICATE OF OWNERSHIP AND MERGER merging EXO-REALTY, INC. into EXOTECH
INCORPORATED, certified by the Secretary of State, State of Delaware on the 28th
day of June, 1976, which is identified as a BASIC DOCUMENT. The document was
originally filed with the Form 10-K for the fiscal year ended June 30, 1976, and
is incorporated herein by reference.
4.1 Specimen copy of a certificate for the Company's common stock, par value
$.10 per share, which is hereby identified as a BASIC DOCUMENT. The specimen was
filed pursuant to a Registration Statement (form S-1) filed on November 8, 1968,
and is incorporated herein by reference.
4.1(a) Specimen copy of a certificate for the Company's common stock, par value
$.10 per share, reprinted due to exhaustion of the initial supply. This specimen
copy was identified as a BASIC DOCUMENT. This exhibit was filed with Form 8 for
the fiscal year ended June 30, 1975, and is incorporated herein by reference.
B. No Form 8-K reports were filed in the fiscal year covered in this
report.
2726
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Act of
1934, the Company has duly caused this amended Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
September 25, 2000 BY: /s/ Robert G. Lyle
---------------------- ---------------------------------------
DATE ROBERT G. LYLE, CHIEF EXECUTIVE OFFICER,
PRINCIPAL ACCOUNTING OFFICER AND DIRECTOR
September 25, 2000 BY: /s/ John M. Talbot
---------------------- ---------------------------------------
DATE JOHN M. TALBOT, TREASURER (PRINCIPAL
FINANCIAL OFFICER) AND DIRECTOR
September 25, 2000 BY: /s/ Theodore J. Parreco
----------------------
SEPTEMBER 25, 2001 BY: /s/ ROBERT G. LYLE
------------------------- ---------------------------------------
DATE ROBERT G. LYLE, CHIEF EXECUTIVE OFFICER,
PRINCIPAL ACCOUNTING OFFICER AND DIRECTOR
SEPTEMBER 25, 2001 BY: /s/ JOHN M. TALBOT
------------------------- ---------------------------------------
DATE JOHN M. TALBOT, TREASURER (PRINCIPAL
FINANCIAL OFFICER) AND DIRECTOR
SEPTEMBER 25, 2001 BY: /s/ THEODORE J. PARRECO
------------------------- ---------------------------------------
DATE THEODORE J. PARRECO, SECRETARY AND
DIRECTOR
28
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