SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended December 29, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _______________ to ________________
Commission File No. 0-2052
GODDARD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2268165
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
705 Plantation Street, Worcester, Massachusetts 01605
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (508)852-2435
Check whether the registrant (1) filed all reports required to be filed
by Section 13 or 15 (d) of the Exchange Act during the past 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
requirements for 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.
Title of Each Class of Number of Shares Outstanding
Common Equity Outstanding at December 29, 2001
Common Stock, $.01 par value 2,560,684
Transitional Small Business Disclosure Format
Yes [ ] No [ X ]
GODDARD INDUSTRIES, INC.
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheet - December 29, 2001
and September 29,2001 3
Consolidated Statement of Operations - Three Months Ended
December 29, 2001 and December 30, 2000 5
Consolidated Statement of Shareholders' Equity - Three Months
Ended December 29, 2001 6
Consolidated Statement of Cash Flows - Three Months Ended
December 29, 2001 and December 30, 2000 7
Notes to Consolidated Financial Statements 9
Item 2 Management Discussion and Analysis 15
PART II - OTHER INFORMATION
Item 2 Changes in Securities 18
Item 4 Submission of Matters to a Vote of Security Holders 18
Item 6 Exhibits and Reports on Form 8-K 18
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GODDARD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
December 29, 2001 September 29, 2001
ASSETS Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents $1,015,656 $ 815,704
Accounts receivable, net of allowances 850,463 1,198,049
Inventories 2,695,498 2,645,007
Refundable taxes on income 212,564 222,672
Prepaid expenses and taxes 53,329 166,085
Deferred income taxes 286,218 283,943
TOTAL CURRENT ASSETS 5,113,728 5,331,460
NET PROPERTY, PLANT AND EQUIPMENT 1,684,429 1,732,675
OTHER ASSETS:
Deferred charges 100,414 83,084
Deferred income taxes - long term 302,585 245,864
Investment 250,000 250,000
Deferred financing charges 51,732 52,101
Goodwill 2,276,433 2,239,917
TOTAL OTHER ASSETS 2,981,164 2,870,966
TOTAL ASSETS $9,779,321 $9,935,101
LIABILITIES AND SHAREHOLDERS'EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $1,953,859 $2,040,771
Accounts payable 490,255 727,511
Accrued expenses 537,233 505,119
Taxes payable 105,146 99,753
Deferred compensation 77,976 77,976
TOTAL CURRENT LIABILITIES 3,164,469 3,451,130
LONG-TERM DEBT 1,346,447 1,332,937
DEFERRED COMPENSATION 434,084 439,863
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SHAREHOLDERS' EQUITY:
Capital Stock:
Preferred stock - par value $.01 per share;
3,000,000 shares authorized, none issued
or outstanding. -
Common stock - par value $.01 per share;
12,000,000 shares authorized, 2,560,684
issued and outstanding at December 29, 2001;
3,000,000 shares authorized, 2,160,684
issued and outstanding at
September 29, 2001 25,607 21,607
Additional paid-in capital 700,487 498,487
Accumulated other comprehensive income (27,816) (67,971)
Retained earnings 4,136,043 4,259,048
TOTAL SHAREHOLDERS'EQUITY 4,834,321 4,711,171
TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY $9,779,321 $9,935,101
The accompanying notes are an integral part
of the consolidated financial statements
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GODDARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three For the Three
Months Ended Months Ended
December 29, 2001 December 30, 2000
NET SALES $1,643,336 $1,394,873
COST OF SALES 1,061,243 833,959
GROSS PROFIT 582,093 560,914
SELLING AND ADMINISTRATIVE
EXPENSES 731,711 575,092
INCOME (LOSS) FROM OPERATIONS (149,618) (14,178)
OTHER INCOME (EXPENSE):
Interest expense (58,521) (71,031)
Other income, net 7,957 44,773
Foreign exchange (3,423) (75,200)
TOTAL OTHER INCOME (EXPENSE) (53,987) (101,458)
INCOME (LOSS) BEFORE TAXES (203,605) (115,636)
PROVISION FOR (BENEFIT FROM)
INCOME TAXES (80,600) (41,148)
NET LOSS (123,005) ($74,488)
EARNINGS PER SHARE:
Net Income:
Basic $(0.06) ($0.03)
Diluted N/A N/A
The accompanying notes are an integral part
of the consolidated financial statements
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GODDARD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS'EQUITY
3 MONTHS ENDED DECEMBER 29, 2001
Accum
Additional Compre- Other Com-
Common paid-in hensive Retained prehensive
stock capital income earnings income Total
Balance at
September 29, 2001
2,160,684 shares $21,607 $498,487 $4,259,048 $-67,971 4,711,171
Net loss - - -123,005 -123,005 - -123,005
Other comprehensive income:
Foreign currency
translation, net
of taxes of $27,000 - - 40,155 - 40,155 40,155
Comprehensive income $-82,850
Proceeds from sale of
common stock
400,000 shares $4,000 396,000 - - 400,000
Payment of private
placement costs -194,000 - - -194,000
Balance at
December 29, 2001
2,560,684 shares $25,607 $700,487 $4,136,043 $-27,816 4,834,321
The accompanying notes are an integral part
of the consolidated financial statements
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GODDARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
December 29, 2001 December 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net operating loss $(123,005) (74,488)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 119,014 92,080
Changes in assets and liabilities:
Accounts receivable 367,190 (133,701)
Inventories (22,126) (28,037)
Refundable income taxes 10,108 -
Prepaid expenses and other 113,244 (19,110)
Accounts payable (248,848) 263,547
Accrued expenses 23,416 (124,313)
Income taxes receivable/payable 2,045 (48,000)
Deferred income taxes (82,645) 12,100
Deferred compensation (6,546) (13,488)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 151,847 (73,410)
CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred charges (17,330) 117,262
Property, plant and equipment additions (29,054) (26,621)
Proceeds from sale of equipment - 12,173
Investment in net assets of
subsidiary, net of cash - (4,100,070)
NET CASH USED IN INVESTING
ACTIVITIES (46,384) (3,997,256)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt - 3,702,600
Repayments of long term debt (122,311) (55,532)
Financing Fees Deferred - (61,231)
Issuance of common stock 206,000 7,500
NET CASH PROVIDED BY
FINANCING ACTIVITIES 83,689 3,593,337
EFFECT OF EXCHANGE RATE CHANGES ON CASH 10,800 54,804
NET INCREASE (DECREASE) IN CASH 199,952 (422,525)
CASH AND EQUIVALENTS - BEGINNING 815,704 1,630,711
CASH AND EQUIVALENTS - ENDING $1,015,656 $1,208,186
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Supplemental Disclosures of Cash Flow Information
CASH PAID DURING THE PERIOD:
Interest $49,600 $71,300
Income taxes - -
The accompanying notes are an integral part
of the consolidated financial statements
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GODDARD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2001
(UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Reference is made to the financial statements included in the Annual Report
for the year ended September 29, 2001 for a summary of significant
accounting policies and other disclosures.
Recent Accounting Pronouncements:
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 141 "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires
that all business combinations initiated after June 30, 2001 be accounted
for under the purchase method of accounting and addresses the initial
recognition and measurement of goodwill and other intangible assets acquired
in a business combination. SFAS No. 142 addresses the initial recognition
and measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to acquisition. SFAS No. 142 provides that intangible assets
with finite lives be amortized, and that goodwill and intangible assets with
indefinite lives be tested at least annually for impairment, rather than
being amortized. Upon adoption of SFAS Nos. 141 and 142 the Company will
stop amortization of goodwill that resulted from business combinations
completed prior to the adoption of SFAS No. 141. The Company currently has
goodwill and other intangible assets on its balance sheet. The Company is
required to adopt SFAS Nos. 141, and 142, on October 1, 2002. Management is
in the process of evaluating the impact of adopting the above standards.
In October 2001 the Financial Accounting Standards Board issued SFAS No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets." This
pronouncement supersedes SFAS No. 121. The Company is required to adopt SFAS
No.144 on October 1, 2002. Management is in the process of evaluating the
impact of adopting the above standard.
In October 2001 the Financial Accounting Standards Board also issued SFAS
No. 143 "Accounting for Asset Retirement Obligations." The Company does not
hold any assets affected by this statement and it is not expected to have a
material impact on the Company's financial statements.
Asset Impairment:
In accordance with SFAS No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of", long-lived assets
to be held and used by the Company are reviewed to determine whether any
events or changes in circumstances indicate that the carrying amount of the
asset may not be recoverable. For long-lived-assets to be held and used,
the Company bases its evaluation on such impairment indicators as the nature
of the assets, the future economic benefits of the assets, any historical or
future profitability measurements, as well as other external market
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conditions or factors that may be present. If such impairment indicators
are present or other factors exist that indicate that the carrying amount of
the asset may not be recoverable, the Company determines whether an
impairment has occurred through the use of an undiscounted cash flow
analysis of assets at the lowest level for which identifiable cash flows
exist. If impairment has occurred, the Company recognizes a loss for the
difference between the carrying amount and the estimated value of the asset.
The fair value of the asset is measured using an estimate of discounted cash
flow analysis.
NOTE 2. BASIS OF PRESENTATION:
The accompanying financial statements include the accounts of Goddard
Industries, Inc. (Industries), its wholly-owned subsidiaries Goddard Valve
Corporation (Goddard Valve), Goddard Management Company, Inc. (Management),
incorporated on July 29, 1999, and Mack Valves Pty Ltd (Mack Valves),
acquired on November 1, 2000 (collectively, the Company). The results of
Mack Valves operations are reported for the period beginning with the date
of its acquisition on November 1, 2000.
All material intercompany transactions have been eliminated.
The information shown in the consolidated financial statements reflects all
adjustments that are, in the opinion of management, necessary for a fair
presentation of the results for the interim period, and are subject to
adjustment at year end.
NOTE 3. INVENTORIES:
Consolidated inventories are comprised of:
December 29, September 29,
2001 2001
Finished goods $2,178,852 $2,171,206
Work in process 133,617 109,169
Raw materials 383,029 364,632
$2,695,498 $2,645,007
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NOTE 4. LONG-TERM DEBT:
At December 29, 2001 Long-term debt consisted of the following:
LONG-TERM CURRENT
Note payable, Fleet National Bank, due in monthly
installments of approximately $17,000 plus interest at the
bank's prime rate plus 0.50% through October, 2005. $ - 731,667
Revolving line of credit, Fleet National Bank, bearing
interest at the bank's prime rate plus 0.25%,
due in February 2003. - 1,100,000
Note payable, National Australia Bank, due in
quarterly installments of approximately A$71,000
($36,000) including interest at 8.85% through
November 2005 (Denominated in AUD). 395,281 113,079
Revolving line of credit, National Australia Bank,
current rate of 8.55% through October 2005.
Commencing November 1, 2005 quarterly payments
of principal plus interest in amounts sufficient
to amortize the then outstanding balance by
October 31, 2010. Interest may not exceed 9.55%
for the life of the loan. (Denominated in AUD). 920,160 -
Capital lease obligations for machinery.
(Denominated in AUD). 31,006 9,113
$1,346,447 $1,953,859
All of the above bank debt is secured by substantially all assets of the
Company. The Company is not in compliance with certain financial covenants
of its loans with Fleet National Bank, and accordingly, the Company has
classified the Fleet National Bank debt as current. See note 10, Subsequent
Events, for further discussion of long-term debt.
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NOTE 5. INCOME TAXES:
The tax effects of the principal temporary differences giving rise to the
net current and non-current deferred tax assets are as follows:
December 29, September 29,
2001 2001
Deferred tax asset
Deferred compensation $ 198,000 $ 198,000
Capital loss carry forward 167,700 167,700
Inventory valuation 142,800 142,800
Foreign currency exchange 19,000 46,000
Accrued salaries and long service leave 100,900 100,900
Bad debts 28,300 28,300
Foreign tax credit carry forward 95,000 93,000
Net operating loss carry forward 119,600 37,000
Other 3,703 2,307
Total gross deferred tax assets 875,003 816,007
Depreciation (88,300) (88,300)
Amortization (30,200) (30,200)
Deductions (118,500) (118,500)
Gross deferred tax liability 756,503 697,507
Less valuation allowance (167,700) (167,700)
$588,803 $529,807
Management has established a valuation allowance against the
deferred tax asset attributable to the capital loss carry forward.
NOTE 6. ENVIRONMENTAL MATTERS:
In 1998, the Company filed a Class "C" Response Action Outcome (RAO)
Statement with the Massachusetts Department of Environmental Protection
regarding its facility in Worcester, Massachusetts. The Company has been
conducting periodic monitoring as required by the RAO. No further action is
required at this time.
NOTE 7. EARNING PER SHARE:
The following data show the amounts used in computing earnings per share
(EPS) from operations.
Three months ended December 29, 2001
Loss Common Shares EPS
Basic EPS:
Income available to common
shareholders ($123,005) 2,165,080 ($.06)
Diluted EPS are not applicable for a period in which a loss is reported.
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Three months ended December 30, 2000
Loss Common Shares EPS
Basic EPS:
Income available to common
shareholders ($74,488) 2,145,238 ($.03)
Diluted EPS are not applicable for a period in which a loss is reported.
NOTE 8. SEGMENT INFORMATION:
The Company conducts operations through business segments established along
the following geographic lines: Western Hemisphere, which is represented by
Goddard Valve, and Asia/Pacific, represented by Mack Valves. Certain
expenses that are related to corporate activities, and unrelated to business
segment activities, are separately stated.
Summarized segment financial information for the three months ended December
29, 2001, in thousands of dollars, is as follows:
Western Asia/
Corporate Hemisphere Pacific Total
Total sales - $ 830 $ 834 $1,664
Intercompany sales 2 19 21
Sales to external
Customers - 828 815 1,643
Operating profit (139) ( 4) ( 7) (150)
Total interest (expense) (9) (50) (59)
Total other income (loss) - 4 4 8
Foreign exchange - - (3) (3)
Segment profit(loss) (65) - (58) (123)
Segment assets 7,880 8,401 4,119 20,400
Eliminations in
consolidation (6,688) (3,783) (150) (10,621)
Total assets $1,192 $4,618 3,969 $9,779
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Summarized segment financial information for the three months ended December
30, 2000, in thousands of dollars, is as follows:
Western Asia/
Corporate Hemisphere Pacific Total
(2 months)
Sales to external
Customers - 796 599 1,395
Operating profit (81) 29 38 (14)
Total interest (expense) (9) (1) (61) (71)
Total other income (loss) 1 43 1 45
Foreign exchange (75) - - (75)
Segment profit(loss) (101) 61 (34) (74)
NOTE 9 CAPITAL STOCK
On October 31, 2001, the stockholders of the Company approved resolutions to
amend the corporation's Restated Articles of Organization to increase the
number of shares of the Company's common stock authorized to be issued from
3,000,000 to 12,000,000 shares and to authorize 3,000,000 shares of a new
class of preferred stock, as yet undesignated as to series.
In December 2001, the Company initiated an offering of common stock, and
warrants to purchase common stock, on a private placement basis in order to
raise up to $3,000,000 of equity capital to fund its acquisition strategy
and working capital needs. In the offering, each share of common stock and
each warrant, which is exercisable for an additional share of common stock,
comprise one unit (each a Unit). Units are being offered at $1.00 per Unit,
with the warrants exercisable at $2.00 per share of common stock. On
December 28, 2001, the Company consummated an initial closing of the private
placement at which certain executive officers and directors of the Company
purchased Units for an aggregate purchase price of $400,000. Expenses
associated with the private placement, totaling $194,000, have been charged
to additional paid-in capital during the period ending December 29, 2001.
NOTE 10 SUBSEQUENT EVENTS
In an effort to improve and expand availability of working capital and to
assure further funds for acquisitions, the Company has reached an agreement
in principle with the Commerce Bank and Trust Company of Worcester,
Massachusetts to replace all current Fleet National Bank banking facilities.
On February 11, 2002, the Company signed a commitment letter with the
Commerce Bank and Trust Company that contemplates a closing date prior to
March 15, 2002. This commitment is subject to normal due diligence
procedures by Commerce Bank and Trust Company.
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PART I - FINANCIAL INFORMATION
Item 2 - MANAGEMENT DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED DECEMBER 29, 2001
Net sales for the three months ended December 29, 2001 were $1,643,000 with
a net loss of $123,000, or $.06 per share, compared with net sales of
$1,395,000 and a net loss of $75,000 or $.03 per share, for the
corresponding period last year. Comparison of results with last year's
quarter is affected by the fact that last year's first fiscal quarter
included only two months of results for Mack Valves, compared with a full
three months this year.
New orders received in the first quarter were 4.9% higher than for the same
period last year. New orders at Goddard Valve were 3.9% higher than for the
same quarter last year, with orders from three contracts with major
industrial gas suppliers more than offsetting declines from other customers.
At Mack Valves, new orders were 6.1% higher. However, after adjusting for
three versus two months of results, orders in this year's first quarter were
lower than the same period last year. The Australian and Southeast Asia
economies have been particularly hard-hit following global economic
slowdowns. In an effort to increase sales and in line with our efforts to
expand our coverage for our global customers, the Company opened a new office
in Shanghai, China in February 2002 to serve the buoyant Chinese marketplace.
At December 29, 2001, the backlog of orders was 37% lower than at the end of
last year's first quarter, with Goddard Valve's backlog down 6% and Mack
Valves' down 59%.
The consolidated operating loss during the first quarter of this fiscal year
was $150,000 versus $14,000 last year. Of the $136,000 difference, $33,000
was at Goddard Valve, $45,000 at Mack Valves, and the remaining $58,000 at
the corporate level.
The decline in operating profit at Goddard Valve of $33,000 was the result
of higher cost of goods, which were partially offset by lower SG&A expenses.
Cost of goods has been rising in the last year at Goddard Valve but appears
to have stabilized in the first quarter, albeit at a level higher than last
year's first quarter. The Company's program to lower costs through alternate
sourcing is intended to improve margins. This program is just getting
underway. Lower SG&A expenses resulted from actions taken in October of 2001
to lower expenses within Goddard Valve and Corporate operations. These
actions included reductions in management salaries of 10%, a freeze on all
other salaries, a 15% workforce reduction, and selected reductions in other
costs.
The decline in operating performance of $45,000 at Mack Valves from last
year's corresponding quarter was in part due to inclusion of three versus
two months of expenses. Although sales were up for the same reason, they
were not up sufficiently to cover the full three months of SG&A expenses in
this year's results.
The increase of $58,000 in corporate level expenses is the result primarily
of the Company's global expansion plans, which included the opening of
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Goddard Industries - Europe in Oxford England, in May of 2001. This year's
first quarter includes a full complement of expense for that office, whereas
none were present in last year's first quarter.
This year's other income and expenses were favorable by $47,000 when
compared to the same period last year. Interest expense was lower due to
lower interest rates This year's foreign exchange loss of $3,000 was small
compared with last year's loss of $75,000 on a foreign exchange contract
taken out to protect the US dollar value of the Mack acquisition. Partly
offsetting these favorable differences was a lower other income difference
of $37,000. This difference was the result primarily of two factors: lower
interest income since funds which had been invested in interest bearing
securities last year were now invested in the business; and the absence this
year of rental income from space which was rented last year and vacated at
the beginning of the first quarter of this year.
LIQUIDITY AND CAPITAL RESOURCES
The acquisition of Mack Valves was financed through secured credit
facilities amounting to approximately $3,668,000 furnished by Fleet National
Bank and National Australia Bank Limited. At December 29, 2001, long-term
debt equaled $3,300,000, of which $1,832,000 held by Fleet National Bank had
been classified as current as a result of the Company not being in
compliance with covenants associated with that debt. Cash and cash
equivalents totaled $1,016,000 and working capital was $1,950,000.
The Company incurred additional debt, and therefore increased interest
costs, as a result of its acquisition of Mack Valves. These increased costs
could have an effect on the Company's liquidity and capital resources.
In an effort to improve and expand availability of working capital and to
assure further funds for acquisitions, the Company entered into discussions
with the Commerce Bank and Trust Company of Worcester, Massachusetts to
replace all current banking facilities with Fleet. An agreement in principle
was reached, and the Company signed a commitment letter with Commerce Bank
and Trust Company on February 11, 2002 for a new bank facility which would
increase the Company's available working capital by about $400,000 and make
available $1,000,000 toward future acquisitions. This new facility is
expected to go into effect during March 2002. This commitment is subject to
normal due diligence procedures by Commerce Bank and Trust Company.
Additionally, in December 2001, the Company initiated an offering of common
stock and warrants to purchase common stock on a private placement basis in
order to raise additional equity capital. These funds will be aimed
primarily at funding the Company's acquisition strategy and secondarily at
supplementing working capital for operations. An initial closing of the
sale of common stock and warrants to certain executive officers and
directors of the Company was completed on December 28, 2001, with gross
proceeds to the Company of $400,000. The securities offered in the private
placement have not been and will not be registered under the Securities Act
of 1933, as amended (Securities Act), and may not be offered or sold in the
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United States absent registration under the Securities Act or an applicable
exemption from the registration requirements of the Securities Act. The
private placement could be dilutive to existing stockholders of the Company
on a book value basis. There is no guarantee that the Company will be
successful in completing the private placement.
Management of the Company recognizes that it is necessary to return to
profitability in the long term to assure continued funding of its
operations. The Company plans to do so by increasing business levels and by
reducing its costs and expenses.
Management believes that the new Commerce Bank facility described above will
be sufficient to handle the normal working capital and debt service
requirements of the Company's current business on both a short-term and on a
long-term basis, as well as providing some degree of ability to fund
expansion through acquisition. Money raised through the private placement
should further improve its liquidity position. However, the Company cannot
guarantee that the new Commerce Bank facility will be completed on
acceptable terms, or at all, that any other acceptable credit facility can
be found, or that the private placement will be successful in raising funds.
If the Company is unable to obtain an adequate credit facility, it could
have a material adverse effect on its liquidity and its future operations
and if it is unable to raise equity through the private placement it may not
be able to pursue its expansion strategy.
FORWARD LOOKING INFORMATION
Information in this report includes various forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements with words such as "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect" and similar
expressions, as they relate to the Company, the Company's business or the
Company's management. Forward-looking statements are based largely on the
Company's current expectations and projections about future events and
financial trends affecting the financial condition of the business. These
forward-looking statements are subject to a number of risks, uncertainties
and assumptions about the Company, including, among other things, general
economic and business conditions, both nationally, internationally and in
the Company's markets; the Company's expectations and estimates concerning
the Company's future financial performance, financing plans and the effect
of competition; capital expenditures by competitors; market acceptance of
new products; the development of new competitive technologies; the ability
to satisfy demand for the Company's products; the ability to achieve low
cost sourcing; the availability of key components for the Company's
products; the availability of qualified personnel; the impact of future
acquisitions; international, national, regional and local economic and
political changes; and trends affecting the cryogenic valve industry, the
Company's financial condition or the results of its operations.
Given the uncertainties that attach to the Company's forward-looking
statements, undue reliance should not be placed on them. The Company's
actual results could differ materially from those anticipated in its
forward-looking statements.
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PART II - OTHER INFORMATION
Item 2 - Changes in Securities
In December 2001, the Company initiated an offering of common stock and
warrants to purchase common stock, on a private placement basis in order to
raise up to $3,000,000 of equity capital to fund its acquisition strategy
and working capital needs. In the offering, each share of common stock and
each warrant, which is exercisable for an additional share of common stock,
comprise one unit (each a "Unit"). Units are being offered at $1.00 per
Unit. In connection with the offering, Fechtor, Detwiler & Co., Inc. is
providing the Company with financial advisory services for a fee.
On December 28, 2001, the Company consummated an initial closing of the
private placement at which certain executive officers and directors of the
Company purchased Units for an aggregate purchase price of $400,000.
The warrants which comprise part of each Unit have not yet been issued by
the Company. Each warrant will be exercisable for one share of Common Stock
at a price of $2.00 per share. In addition, each warrant will be separately
tradeable and exercisable at any time after its issuance until December 29,
2006.
The Units were sold in reliance upon the exemption provided by Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act"), and
Regulation D promulgated thereunder.
Item 4 - Submission of Matters to a Vote of Security Holders
At a Special Meeting of Stockholders held on October 31, 2001, the
stockholders of the Company approved resolutions to amend the Company's
Restated Articles of Organization to: (1) increase the number of shares of
the Company's authorized common stock from 3,000,000 to 12,000,000; and (2)
authorize 3,000,000 shares of a new class of preferred stock, as yet
undesignated as to series. The Company reported the results of the
stockholders meeting in its Form 10-KSB/A for the fiscal year ended
September 29, 2001.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement Re: Computation of Per Share Earnings. The
information set forth in Note 7 to the Financial Statements
found in PART I hereof is hereby incorporated.
(b) The Company did not file any reports on Form 8-K during the
quarter covered by this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated as of February 19, 2002
GODDARD INDUSTRIES, INC.
By:/s/Salvatore J. Vinciguerra
----------------------------
Salvatore J. Vinciguerra
President,
Chief Executive Officer
By:/s/Kenneth E. Heyman
----------------------------
Kenneth E. Heyman
Principal Financial and
Accounting Officer
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