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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: DECEMBER 31, 2001 COMMISSION FILE NO. 0-4076
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EXOTECH INCORPORATED
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(Exact name of Registrant as Specified in Charter)
STATE OR JURISDICTION OF
INCORPORATION OR ORGANIZATION: DELAWARE
IRS IDENTIFICATION NO: 54-0700888
ADDRESS OF PRINCIPAL OFFICE: 8502 DAKOTA DRIVE
GAITHERSBURG, MD. 20877
REGISTRANT'S TELEPHONE NUMBER: (301) 948-3060
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] NO [ ]
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT.
CLASS: COMMON STOCK, PAR VALUE $0.10
-----------------------------
OUTSTANDING AT
DECEMBER 31, 2001 942,387
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EXOTECH INCORPORATED
INDEX
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<Caption>
PART I FINANCIAL INFORMATION PAGE NO.
CONSOLIDATED CONDENSED BALANCE SHEET
DECEMBER 31, 2001 AND JUNE 30, 2001.............................. 2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - SIX MONTHS ENDED
DECEMBER 31, 2001 AND 2000....................................... 3
STATEMENT OF CASH FLOWS FOR THREE
MONTHS ENDED DECEMBER 31, 2001 AND 2000.......................... 4
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS............................................. 5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS.................................................... 6
PART II OTHER INFORMATION
OTHER FINANCIAL INFORMATION...................................... 8
SIGNATURES....................................................... 9
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EXOTECH INCORPORATED
CONSOLIDATED BALANCE SHEET
<Table>
<Caption>
ASSETS
DECEMBER 31, JUNE 30,
2001 2001
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(Unaudited)
CURRENT ASSETS
Accts. Receivable, Net $ 265 $ 13,615
Inventories
Work in Process 189,357 196,857
Raw Materials 32,625 32,625
Finished Goods 14,000 14,000
Cash and Other Current Assets 3,150 1,078
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Total Current Assets $239,397 $258,175
PROPERTY, PLANT AND EQUIPMENT
NET 1,402 1,696
OTHER NON CURRENT ASSETS 3,880 3,880
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TOTAL ASSETS $244,679 $263,751
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accts. Payable & Other Accrued Expenses $ 12,550 $10,391
Other Current Liabilities 415,330 400,612
Notes Payable 415,594 411,126
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Total Current Liabilities $843,474 $822,129
SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
1,500,000 shares authorized; 970,135
issued; 942,387 outstanding 97,014 97,014
Paid-in-Surplus 1,169,645 1,169,645
Deficit (1,753,034) (1,712,617)
Treasury Stock (27,748 shares) (112,420) (112,420)
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Total Shareholders' Equity (598,795) (558,378)
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $244,679 $263,751
======== ========
</Table>
See accompanying Notes to Consolidated Condensed Financial Statements.
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EXOTECH INCORPORATED
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<Table>
<Caption>
2001 2000
3 Mos. 6 Mos. 3 Mos. 6 Mos.
ENDED ENDED
REVENEUE: 12/31 12/31 12/31 12/31
----- ----- ----- -----
Contract Sales 7,670 9,019 42,776 108,893
EXPENSES
Direct Labor 132 132 270 2,113
Overhead 8,990 13,388 2,241 9,373
Materials 10 68 1,398 2,000
Other Direct Costs -- 115 4,043 4,924
General & Administrative 7,307 12,366 1,822 3,841
Inventory 7,000 7,500 43,272 73,491
-------- -------- -------- --------
Cost of Sales 23,439 33,569 53,046 95,742
Operating Income (Loss) (15,769) (24,550) (10,270) 13,151
Other Income (Expenses) -- -- 17,867 17,869
Interest & Other (8,364) (15,867) (7,860) (15,730)
NET INCOME BEFORE TAX (24,133) (40,417) (263) 15,290
State Income Tax Provision -- -- -- --
-------- -------- -------- --------
NET INCOME (LOSS) (24,133) (40,417) (263) 15,290
Avg. No. Shares O/S 942,387 942,387 942,387 942,387
EARNINGS (LOSS)
PER COMMON SHARE (0.03) (0.04) -- 0.016
Dividend per Common Share None None None None
</Table>
3
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EXOTECH INCORPORATED AND SUBSIDIARY
STATEMENT OF CASH FLOWS FOR
SIX MONTHS ENDED DECEMBER 31,
<Table>
<Caption>
2001 2000
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CASH FLOWS FROM OPERATING TRANSACTIONS
- --------------------------------------
Net Income (Loss) $(40,417) $ 15,290
Add: Non cash Income Determinants
Depreciation and Amortization 284 284
Add (Deduct): Changes in Current Assets & Liabilities
(Increase) Decrease in Accounts Receivable 13,350 (925)
(Increase) Decrease in Prepaid Expenses 524 1,296
(Increase) Decrease in Inventory 7,500 (3,989)
Increase (Decrease) in Accts. Payable 1,384 5,739
Increase (Decrease) in Payroll/Emp. Benefits (2,070) (31,961)
Increase (Decrease) in Accrued Interest 16,690 15,568
Increase (Decrease) in Deferred Revenue 107 -0-
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Cash PROVIDED BY or (USED) FOR Operating Transactions (2,648) 1,302
CASH FLOWS FROM FINANCING TRANSACTIONS:
Proceeds from Notes 19,250 0
Payment on Notes (14,781) (2,305)
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Cash PROVIDED BY or (USED FOR) Financing Transactions 4,469 (2,305)
CASH FLOWS FROM INVESTING TRANSACTIONS:
Deposits -0- -0-
Purchase of Equipment -0- -0-
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Cash PROVIDED BY or (USED FOR) Investing Transactions -0- -0-
INCREASE (DECREASE) IN CASH 1,821 (1,003)
CASH BALANCE - BEGINNING 1,329 1,921
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CASH BALANCE - ENDING $ 3,150 $ 918
</Table>
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EXOTECH INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
In the opinion of Management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
December 31, 2001 and June 30, 2001 and the results of operations and changes in
financial position for the three months ended December 31, 2001 and 2000 of
Exotech Incorporated and its inactive wholly-owned consolidated subsidiary,
Exotech Research & Analysis, Inc. There are no significant intercompany
transactions.
NOTE 2.
Per share computations have been based on the weighted average shares
outstanding of 942,387 for the six months ended December 31, 2001 and 2000.
NOTE 3.
Notes Payable at December 31, 2001 consist of four demand notes of $100,000,
$8,000 and $47,000, payable with interest at 8.5% per annum to three of the
Company's former directors. In addition, notes amounting to $260,594 are payable
with interest at 8.5% per annum to one officer/employee.
NOTE 4.
Inventory cost shown in the cost of sales represents the cost of production of
goods sold that were incurred in the prior fiscal year.
NOTE 5.
The Company received cash deposits from its tenant amounting to $4,265 at
June 30, 2001. At December 31, 2001 the tenant prepaid utilities increasing the
balance of this liability to $4,372.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
The following is Management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statement of operations.
A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:
<Table>
<Caption>
COMPARISON OF
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THREE MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED
31-Dec 30-Sep 31-Dec 31-Dec 31-Dec 31-Dec
2001 2001 2001 2000 2001 2000
---- ---- ---- ---- ---- ----
Net Sales $9,019 $7,670 $1,349 $42,776 $ 9,019 $108,893
Direct Cost & Overhead 13,703 9,132 4,571 7,952 13,703 18,410
General & Administrative Expense 12,366 7,307 5,059 1,822 12,366 3,841
Inventory Cost 7,500 7,000 500 43,272 7,500 73,491
Cost of Sales 33,569 23,439 10,130 53,046 33,569 95,742
Interest & Other (15,867) (8,364) (7,503) 10,009 (15,867) 2,139
</Table>
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I. CHANGE IN FINANCIAL POSITION IN THE SIX MONTHS ENDED DECEMBER 31, 2001.
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In the six months period ended December 31, 2001, an increase in the
deficit of working capital of $40,123 resulted from a net loss from
operations of $40,417 and non-fund charges of $294. The liability for
deferred revenue decreased to $4,372.
II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME SIX MONTH PERIOD
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LAST YEAR.
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Revenue for the six months ended December 31, 2001, was $9,019 lower by
$99,874 (92%) than the results one year earlier. Cost of sales and
operating costs were lower in the most recent six months by $80,042 or 70%
compared to the prior year. The result was an operating loss of $24,550 and
a net loss of $40,417 compared to net income of $15,290 in the six months
ended one year earlier. The variations shown in the period-to-period
comparison are principally related to the phase out of the microbiological
instruments product manufacturing that characterizes the six month periods.
In the most recent six months, manufacturing was limited to Model 100BX
Radiometers. This activity is reflected in the recent six months by the
decrease of about $65,991 in inventory costs. Most of the revenue for the
six months ended December 31, 2001 as from maintenance, repair and
re-calibration services.
In the opinion of Management, continued stringent control of costs will be
necessary for continued operations while seeking new sales opportunities
for the sale of Radiometers.
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PART II. OTHER FINANCIAL INFORMATION
ITEM 5.
As in the past, a shortage of working capital continues to be a significant
problem, hampering the development of new business to the fullest extent
possible. The shortage is the result of debt in the form of notes and interest
payable to a current and three former directors of the Company. In the opinion
of Management, the Company is in a position to sustain operations at least until
such time as the results of current negotiations for new business are
determinable. Ultimate realization of the carrying value of prepaid expenses and
advances, property and equipment, and miscellaneous other assets shown in the
accompanying balance sheet depends upon sustained operations as a going concern.
Further complicating this process is the death of the Company's president and
chief executive officer on January 18, 2002. The affairs of the Company are
currently being run by the Board of Directors.
The dollar amount of the backlog as of December 31, 2001 was $0, a decrease of
$800 from the backlog of the preceding quarter ended September 30, 2001.
ITEM 6 (B)
No reports on Form 8-K were filed in this quarter, ended December 31, 2001.
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SIGNATURES
Pursuant to the requirements 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.
EXOTECH INCORPORATED
REGISTRANT
DATE: February 11, 2002
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/s/ Theodore J. Parreco
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Secretary
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