UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 1, 2009.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
Commission File Number: 0-1455
OPT-SCIENCES CORPORATION
(Exact name of issuer as specified in its charter)
New Jersey 21-0681502
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1912 Bannard Street, Cinnaminson, New Jersey 08077
(Address of principal executive offices)
(856) 829-2800
Issuer's telephone number
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer (Do not check if Smaller reporting company) [X]
smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company(as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date: 775,585 Shares of Common Stock,
par value $0.25, were outstanding as of September 2, 2009.
FORM 10-Q THIRD QUARTER REPORT - FISCAL YEAR 2009
OPT-SCIENCES CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
Page
PART I FINANCIAL INFORMATION
Item 1 .Financial Statements 3
Consolidated Balance Sheets for August 1, 2009 (unaudited) and
November 1, 2008 3
Consolidated Statements of Income and Retained Earnings
(unaudited) for thirteen and thirty-nine weeks ended August 1, 2009
and fourteen and forty weeks ended July 26, 2008 5
Consolidated Statements of Cash Flows (unaudited) for thirty-nine
weeks ended August 1, 2009 and forty weeks ended July 26, 2008 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Result of Operations 8
Item 3. Quantitative and Qualitative Disclosure About Market Risk 11
Item 4T. Controls and Procedures 11
PART II OTHER INFORMATION 12
Item 1. Legal Proceedings 12
Item 1A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits 13
Signatures 13
Exhibit 31.1 14
Exhibit 32.1 15
Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Opt-Sciences Corporation
CONSOLIDATED BALANCE SHEETS
ASSETS
August 1, 2009 November 1, 2008
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 7,238,986 $ 6,926,000
Trade accounts receivable 462,087 1,119,550
Inventories 658,770 611,180
Prepaid expenses 6,565 18,294
Prepaid income taxes 202,355 -0-
Loans and exchanges 8,148 6,768
Deferred income taxes 40,392 112,216
Marketable securities 556,823 670,318
------------ ------------
Total current assets 9,174,126 9,464,326
PROPERTY AND EQUIPMENT
Land 114,006 114,006
Building and improvements 606,244 567,624
Machinery and equipment 2,078,502 1,559,418
Small tools 53,580 53,580
Furniture and fixtures 14,683 8,775
Office equipment 76,742 74,611
Automobiles 71,211 71,211
------------ ------------
Total property and equipment 3,014,968 2,449,225
Less: accumulated
depreciation 1,902,184 1,757,880
Net property and equipment 1,112,784 691,345
OTHER ASSETS
Deposits 2,837 244,904
------------ ------------
Total assets $ 10,289,747 $ 10,400,575
Table of Contents
Opt-Sciences Corporation
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
August 1, 2009 November 1, 2008
(Unaudited)
CURRENT LIABILITIES
Accounts payable - trade $ 97,080 $ 203,282
Accrued income taxes -0- 40,912
Accrued salaries and wages 92,791 268,758
Accrued professional fees 56,125 50,500
Other current liabilities 17,238 29,546
----------- -----------
Total current liabilities 263,234 592,998
STOCKHOLDERS' EQUITY
Common capital stock - par value
$.025 per share - authorized
and issued 1,000,000 shares 250,000 250,000
Additional paid in capital 272,695 272,695
Retained earnings 9,816,289 9,669,071
Accumulated other comprehensive income:
Unrealized holding (loss)
on marketable securities (125,253) (196,971)
Less treasury stock at cost -
224,415 shares (187,218) (187,218)
------------ ------------
Total stockholders' equity 10,026,513 9,807,577
Total liabilities and
stockholders' equity $ 10,289,747 $ 10,400,575
Table of Contents
Opt-Sciences Corporation
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (unaudited)
Thirteen Fourteen Thirty-Nine Forty
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
August 1, 2009 July 26, 2008 August 1, 2009 July 26, 2008
Net Sales $ 1,002,156 $ 1,848,706 $ 3,588,006 $ 4,853,089
Cost of Sales 765,282 1,177,825 2,799,498 3,205,788
------------ ------------ ------------ ------------
Gross profit on sales 236,874 670,881 788,508 1,647,301
Operating Expenses
Sales & delivery 12,152 13,619 19,240 36,528
General & Administrative 174,270 210,439 562,399 690,695
------------ ------------ ------------ ------------
Total operating expenses 186,422 224,058 581,639 727,223
------------ ------------ ------------ ------------
Operating income 50,452 446,823 206,869 920,078
Other Income 15,046 47,950 32,848 166,751
------------ ------------ ------------ ------------
Net income
before taxes 65,498 494,773 239,717 1,086,829
Federal and State
Income Taxes 27,500 212,700 92,500 467,300
------------ ------------ ------------ ------------
Net income 37,998 282,073 147,217 619,529
Retained Earnings -
beginning of period 9,778,291 9,147,832 9,669,071 8,810,376
Retained Earnings -
end of period $ 9,816,289 $ 9,429,905 $ 9,816,288 $ 9,429,905
Earnings per Share
of Common Stock 0.05 0.36 0.19 0.80
Average shares of stock
Outstanding 775,585 775,585 775,585 775,585
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Opt-Sciences Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Thirty-Nine Forty
Weeks Ended Weeks Ended
August 1, 2009 July 26, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 147,217 $ 619,529
Adjustments to reconcile net income to net
cash (used) by operating activities:
Depreciation 144,304 84,001
Loss on sale of securities 73,794 20,031
Decrease (increase) in:
Accounts receivable 657,463 (332,353)
Inventories (47,590) 51,363
Prepaid expenses 11,729 13,292
Prepaid income taxes (202,355) -0-
Loans and exchanges (1,380) 250
(Decrease) increase in:
Accounts payable (106,202) (6,559)
Accrued income taxes (40,912) (202,918)
Accrued salaries and wages (175,967) (84,403)
Accrued professional fees 5,625 (2,175)
Other current liabilities (12,308) 14,806
------------ ------------
Net cash provided (used) by
operating activities 453,418 174,864
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (323,676) (112,504)
Purchases of securities (65,604) (480,503)
Proceeds from sale of securities 248,848 284,965
Deposits -0- (232,650)
Net cash (used) by
investing activities (140,432) (540,692)
------------ ------------
Increase (decrease) in cash 312,986 (365,828)
Cash and cash equivalents at
beginning of period 6,926,000 6,777,104
Cash and cash equivalents at
end of period $ 7,238,986 $ 6,411,276
SUPPLEMENTAL DISCLOSURES:
Income taxes paid $ 335,767 $ 670,218
Fixed assets purchased with deposit $ 242,067 $ -0-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of Opt-
Sciences
Corporation, Inc. and its wholly-owned subsidiary, O&S Research, Inc. All
significant intercompany
accounts and transactions have been eliminated in consolidation.
These consolidated financial statements have been prepared by the Company,
without audit, and
reflect normal recurring adjustments which, in the opinion of management, are
necessary for a fair presentation of the results for the first nine months of
the Company's fiscal year 2009. These consolidated financial statements do not
include all disclosures associated with annual consolidated financial
statements and, accordingly, should be read in conjunction with footnotes
contained in the Company's consolidated financial statements for the year
ended November 1, 2008 together with the auditors' report filed as part of
the Company's 2008 Annual Report on Form 10-KSB.
The preparation of these consolidated financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. The Company bases its estimates on
historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.
2. INVENTORIES
Inventories consisted of the following:
August 1, 2009 November 1, 2008
(Unaudited)
Raw materials and supplies $237,672 $ 216,404
Work in progress 349,951 328,852
Finished goods 71,147 65,924
--------- ---------
Total Inventory $ 658,770 $ 611,180
End of quarter inventories are stated at the lower of cost (first-in,
first-out) or market. The inventory included on unaudited quarterly financial
statements and in this Form 10-Q is based on estimates derived from an
unaudited physical inventory count of work-in-progress and raw materials.
A physical inventory is conducted at the end of the fiscal year in connection
with the Company's audited financial statements and preparation of its Form
10-K. The Company provides for estimated obsolescence on unmarketable
inventory based upon assumptions about future demand and market conditions.
If actual demand and market conditions are less favorable than those projected
by management, additional inventory write downs may be required. Inventory,
once written down, is not subsequently written back up, as these adjustments
are considered permanent adjustments to the carrying value of the inventory.
3. REVENUE RECOGNITION
The Company recognizes revenue in accordance with U.S. GAAP and SEC Staff
Accounting Bulletin ("SAB") No. 104, Revenue Recognition. SAB No. 104 requires
that four basic criteria must be met before revenue can be recognized: (1)
persuasive evidence of an arrangement exists; (2) delivery has occurred or
services have been rendered; (3) the price to the buyer is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the price to the buyer charged for products delivered or
services rendered and collectibility of the sales price. The Company assesses
credit worthiness of customers based upon prior history with the customer and
assessment of financial condition. The Company's shipping terms are customarily
FOB shipping point.
4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Standards Accounting Board (FASB) issued
interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB statement No. 109. Interpretation 48 clarifies the
accounting for uncertainty in income taxes recognized in an entity's
financial statements in accordance with Statement 109 and prescribes a
recognition threshold and measurement attribute for financial statement
recognition and measurement of a tax position taken or expected to be taken
in a tax return. Additionally, Interpretation 48 provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. Interpretation 48 is effective for fiscal
years beginning after December 15, 2006 with early adoption permitted. We
adopted Interpretation 48 for our fiscal year 2008, and it had no impact on
our financial statements.
Table of Contents
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
We make statements in this Report, and we may from time to time make other
statements, regarding our outlook or expectations for earnings, revenues,
expenses and/or other matters regarding or affecting the Company that are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are typically identified by
words such as "believe," "expect," "anticipate," "intend," "outlook,"
"estimate," "forecast," "project" and other similar words and expressions.
Forward-looking statements are subject to numerous assumptions, risks and
uncertainties, which change over time. Forward-looking statements speak only as
of the date they are made. We do not assume any duty and do not undertake to
update our forward-looking statements. Actual results or future events could
differ, possibly materially, from those that we anticipated in our forward-
looking statements, and future results could differ materially from our
historical performance. Our forward-looking statements are subject to risks and
uncertainties including those discussed in the Risk Factors section of this
Quarterly Report and in our other filings with the SEC.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's discussion and analysis of financial condition and results of
operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). The preparation of
these financial statements requires the Company to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues
and expenses. The Company bases its estimates on historical experience and
on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. Specifically, inventory is estimated
quarterly and reconciled at the end of the fiscal year when a comprehensive
physical count is conducted (also see Notes to Consolidated Financial
Statements, Note 1 Summary of Significant Accounting Policies and
Note 2 Inventories).
EXECUTIVE SUMMARY
Opt-Sciences Corporation, through its wholly owned subsidiary, O & S Research,
Inc., both New Jersey corporations, manufactures anti-glare and transparent
conductive optical coatings which are deposited on glass used primarily to
cover instrument panels in aircraft cockpits. The Company's business is highly
dependent on a robust commercial, business, regional and military aircraft
market. The international financial crisis has affected purchasers of
commercial, business and regional aircraft by inhibiting their ability to
finance and their desire to purchase new airplanes. We recognized third
quarter sales of $1,002,156 and net income of $37,998. Sales are down 12% from
the second quarter of fiscal year 2009. Compared to the third quarter of 2008,
sales are down 46%. We currently expect fourth quarter sales to be
approximately $1,200,000. All of our markets, especially the business jet
market, remain weak. Our concern is that they may deteriorate further than
their current levels in fiscal 2009. During the third quarter of 2009, the
Company booked $874,000 in new orders compared to $1,063,000 in new orders
booked for the second quarter of 2009 and $1,640,000 for the third quarter of
finscal year 2008. Our backlog of unshipped orders was approximately $1,269,000
at the end of the third quarter, down approximately 10% from $1,397,000 at the
end of the second quarter of 2009 and down approximately 43% from the
$2,233,700 backlog at the end of the third quarter of fiscal year 2008. We
generally have a four to twelve week delivery cycle depending on product
complexity, available plant capacity and required lead time for specialty raw
materials such as polarizers or filter glass. Our sales tend to fluctuate from
quarter to quarter because all orders are custom manufactured and customer
orders are generally scheduled for delivery based on our customer's need date
and not based on our ability to make shipments. The Company has two customers
that together represent over 50% of sales and approximately 50% of receivables.
Any significant change in the requirements of either of those customers has a
direct impact on our revenue for the quarter.
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED AUGUST 1, 2009 COMPARED WITH FOURTEEN WEEKS ENDED
JULY 26, 2008
Net Sales.
Net sales for the third quarter ended August 1, 2009 were $1,002,156 which is
$846,550 and 46% less than the net sales of $1,848,706 for the same quarter
last year. This significant decrease in sales is primarily the result of the
rapid decline in business jet demand and the deterioration of the global
economy.
Cost of Sales.
Cost of sales for the quarter ended August 1, 2009 decreased $412,543 or 35% to
765,282 or 76% of sales, compared to $1,177,825 or 64% of sales for the third
quarter last year. This decrease in cost of sales is primarily related to the
decline in sales. The cost of sales as a percentage of sales has increased
because the Company is operating less efficiently than during the same period
last year. We have downsized operations and capacity to current levels making
sure not to jeopardize our ongoing operations. This was necessary because of
the rapid deterioration of the business jet market caused by the downturn in
the global economy. Cost of sales is comprised of raw materials, manufacturing
direct labor and overhead expenses. The overhead portion of cost of sales
includes salaries, benefits, building expenses, production supplies, and
maintenance costs related to our production, inventory control and quality
control departments.
Gross Profit.
Gross profit for the quarter ended August 1, 2009 decreased 65% or $434,007 to
$236,874 or 24% of sales from $670,881 or 36% of sales reported for the same
quarter last year, primarily as a result of the significant decline in sales
and the loss of economies of scale in production.
Operating Expenses.
Operating expenses decreased $37,636 or 17% to $186,422 from $224,058 for the
same quarter last year. The primary reason was elimination of the accrual of
year end employee bonuses, approximately $30,000, in light of the current and
future economic challenges the Company faces. Operating expenses consist of
marketing and business development expenses, professional expenses, salaries
and benefits for executive and administrative personnel, legal, accounting, and
other general corporate expenses.
Operating Income.
The Company realized operating income of $50,452 or 5% of sales, for the
quarter ended August 1, 2009, compared to operating income of $446,823 or 24%
of sales for the same quarter last year. The decline in operating income is
principally the result of reduced gross margin as noted above.
Other Income (Expenses).
Other income of $15,046 for the third quarter of fiscal year 2009 decreased
$39,904 from $47,950 for the same quarter last year, primarily due to losses
realized on sale of securities.
Provisions for Income Tax.
Income tax expense for the third quarter ended August 1, 2009 was $27,500 or
42% of pre-tax income, compared to $212,700 or 43% of pre-tax income for the
third quarter ended July 26, 2008.
Net Income
Net income for the third quarter ended August 1, 2009 was $37,998 or $.05 per
share, compared to net income of $282,073 or $.36 per share, for the third
quarter ended July 26, 2008, for the reasons outlined above.
THIRTY-NINE WEEKS ENDED AUGUST 1, 2009 COMPARED WITH FORTY WEEKS ENDED
JULY 26, 2008
Net Sales.
Net sales for the three quarters ended August 1, 2009 were $3,588,006 which is
$1,265,083 and 26% less than the net sales of $4,853,089 for the same three
quarter period last year. This is primarily due to reduced customer demand for
the company's products in the current economic downturn.
Cost of Sales.
Cost of sales for the three quarters ended August 1, 2009 was $2,799,498 or 78%
of sales, compared to $3,205,788 or 66% of sales, for the same period last
year. The cost of sales as a percentage of sales has increased because the
Company is operating less efficiently than during the comparable period in
fiscal 2008.
Gross Profit.
Gross profit for the three quarters ended August 1, 2009 decreased $858,793 to
$788,508 or 22% of sales, from $1,647,301 or 34% of sales, reported for the
same period last year. The decrease in total gross profit, and the decline in
gross profit as a percent of revenues, was primarily a result of the rapid
decline in sales and the loss of significant economies of scale.
Operating Expenses.
Operating expenses decreased by $145,584 and 20% from $727,223 during the three
quarter period ended July 26, 2008 to $581,639 during the three quarter period
ended August 1, 2009. The reduced operating expenses are principally due to the
elimination of the year-end employee profit sharing accrual, approximately
$90,000.
Operating Income.
The Company realized operating income of $206,869 or 6% of sales, for the three
quarter period ended August 1, 2009, compared to operating income of $920,078
or 19% of sales, for the same period last year. The $713,209 decrease is the
result of a reduced gross margin as noted above.
Other Income.
Other income of $32,848 for the three quarter period ended August 1, 2009
decreased $133,903 from $166,751 for the same period for last year, primarily
due to losses realized on sale of securities.
Income Tax.
Income tax expense for the three quarter period ended August 1, 2009 was
$92,500 and 39% of pre-tax income, compared to $467,300 and 43% of pre-tax
income for the nine month period ended July 26, 2008.
Net Income/Loss.
Net income for the three quarter period ended August 1, 2009 declined $472,312
and 76% to $147,217 or $0.19 per share, compared to net income of $619,529 or
$0.80 per share for the prior comparable period, for the reasons outlined above.
Financial Condition
The Company utilizes its working capital to finance current operations and
capital improvements. Cash and cash equivalents have increased $312,986 from
$6,926,000 at the end of the fiscal year on November 1, 2008 to $7,238,986 for
the nine month period ended August 1, 2009. The increase in cash and cash
equivalents is primarily a result of net receipts from trading in the Company's
portfolio of securities. The Company maintains a strong liquidity in its
current position in order to improve its ability to deal with the risks and
uncertainties identified below.
Table of Contents
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting Company" as defined by Item 10 of Regulation S-K, the
Company is not required to provide information required by Item 3.
ITEM 4T. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated
the effectiveness of our disclosure controls and procedures as defined in Rules
13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as of the end of the period covered by this quarterly report.
Based on such evaluation, our CEO and CFO has concluded that, as of the end of
the period covered by this quarterly report, our disclosure controls and
procedures are effective. Disclosure controls and procedures are controls and
procedures designed to ensure that information required to be disclosed in
our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules
and forms and include controls and procedures designed to ensure that
information we are required to disclose in such reports is accumulated and
communicated to management, including our CEO and CFO, as appropriate to
allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial
reporting that occurred during the quarter ended August 1, 2009 or thereafter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
Table of Contents
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to certain claims and litigation in the ordinary course of
business. It is the opinion of management that the outcome of such matters will
not have a material adverse effect on our combined financial position or
results of operations.
ITEM 1A RISK FACTORS
The Company faces numerous financial challenges and risks. In our view, the
following are among the most important:
- - The longevity and ultimate depth of financial declines related to the current
economic recession are not known; however, that recession is having a severe
and adverse impact on our customers and the aircraft industry market.
- - The turbulence in financial markets is adversely affecting our investment
portfolio, which may decline further in value.
- - Our deposits in bank accounts are concentrated in two banks and such deposits
are not fully covered by deposit insurance.
- - The Company's historic aircraft instrument glass wedges are being purchased
less frequently than LCD displays and are becoming technologically obsolete.
- - LCD displays now commonly used for new aircraft instruments are larger in
size than the smaller, specialized lenses they replace. The LCD display design
requires a simpler, less expensive cover glass that the Company manufactures.
Businesses not active in the glass wedge market can more easily manufacture the
cover glasses for LCDs in competition with the Company.
- - The Company has become more active in the market for providing cover glass
with both conductive coating and anti reflective coating. In anticipation of
increased demand for such products, the Company has purchased and installed a
new vacuum coating chamber. If the Company's expectations for demand are
incorrect, the Company will have devoted significant resources to installing
unnecessary manufacturing capacity.
- - We face increasing competition from established companies that have
significantly greater resources. Certain of our competitors enjoy substantial
competitive advantages, such as:(a) Greater corporate name recognition, larger
marketing budgets and greater resources,(b) Established marketing relationships
and access to larger customer bases, and (c) Substantially greater financial,
technical and other resources.
- - We expect that Section 404 of the Sarbanes-Oxley Act of 2002 will require
that our public accounting firm audit our internal controls in the future. The
Company expects its operating expenses will increase further as a result of the
costs associated with implementation of and maintaining compliance with Section
404 and other provisions of the Sarbanes-Oxley Act.
Table of Contents
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
The registrant does not have in place procedures by which stockholders may
recommend nominees to the registrant's Board of Directors.
ITEM 6. EXHIBITS
(A) Exhibits
The Documents listed below are being filed as exhibits herewith.
Exhibit Number Description of Document
31.1 Officer's Certificate pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Officer's Certificate pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
SIGNITURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunder duly authorized.
OPT-SCIENCES CORORATION
/s/ Anderson L. McCabe
- -------------------------
Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 14, 2009
Table of Contents
EXHIBIT 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Anderson L. McCabe, as CEO and CFO of Opt-Sciences Corporation, certify that:
1. I have reviewed this quarterly report of Opt-Sciences Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of Opt-Sciences
Corporation as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for Opt-Sciences Corporation and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under my supervision, to ensure that
material information relating to Opt-Sciences Corporation, including its
consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of Opt-Sciences Corporation's disclosure
controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in Opt-Sciences Corporation's internal
control over financial reporting that occurred during Opt-Sciences
Corporation's most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, Opt-Sciences Corporation's internal
control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control
over financial reporting, to Opt-Sciences Corporation's auditors and the audit
committee of Opt-Sciences Corporation's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect Opt-Sciences Corporation's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in Opt-Sciences Corporation's internal
control over financial reporting.
/s/ Anderson L. McCabe
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Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 14, 2009
Table of Contents
EXHIBIT 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
I, Anderson L. McCabe as CEO and CFO of Opt-Sciences Corporation (the
"Company"), certify to my knowledge, pursuant to section 906 of the Sarbanes-
Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period
ended August 1, 2009 (the "Report") fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)); and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Anderson L. McCabe
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Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 14, 2009
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