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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: MARCH 31, 2002 COMMISSION FILE NO. 0-4076
--------------- ------
EXOTECH INCORPORATED
(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.
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CLASS: COMMON STOCK, PAR VALUE $0.10
-----------------------------
OUTSTANDING AT
MARCH 31 , 2002 942,387
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EXOTECH INCORPORATED
INDEX
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<Caption>
PART I FINANCIAL INFORMATION PAGE NO.
CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 2002 AND JUNE 30, 2001................................. 2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - SIX MONTHS ENDED
MARCH 31, 2002 AND 2001.......................................... 3
STATEMENT OF CASH FLOWS FOR THREE
MONTHS ENDED MARCH 31, 2002 AND 2001............................. 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
ASSETS
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<Caption>
MARCH 31, JUNE 30,
2002 2001
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(Unaudited)
CURRENT ASSETS
Accounts Receivable, Net $ 6,690 $ 13,615
Inventories
Work in Process 132,000 196,857
Raw Materials 0 32,625
Finished Goods 0 14,000
Cash and Other Current Assets 1,182 1,329
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Total Current Assets $ 139,872 $ 258,426
PROPERTY, PLANT AND EQUIPMENT NET 1,260 1,696
OTHER NON CURRENT ASSETS 3,674 3,629
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TOTAL ASSETS $ 144,806 $ 263,751
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accts. Payable & Other Accrued Expenses $ 565 $ 10,391
Other Current Liabilities 424,050 400,612
Notes Payable 418,094 411,126
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Total Current Liabilities $ 842,709 $ 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 (1,852,142) (1,712,617)
Treasury Stock (27,748 shares) (112,420) (112,420)
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Total Shareholders' Equity (697,903) (558,378)
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TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 144,806 $ 263,751
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See accompanying Notes to Consolidated Condensed Financial Statements.
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EXOTECH INCORPORATED
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
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<Caption>
2002 2001
3 Mos. 9 Mos. 3 Mos. 9 Mos.
ENDED ENDED
REVENEUE: 03/31 03/31 03/31 03/31
----- ----- ----- -----
Contract Sales $ 6,775 $ 15,793 $ 10,051 $ 118,944
EXPENSES
Direct Labor -- 132 974 3,087
Overhead (2,796) 10,656 3,719 13,092
Materials -- 68 -- 2,000
Other Direct Costs -- 115 -- 3,351
Travel -- 1,573
General & Administrative (3,773) 8,594 2,640 6,481
Inventory 111,482 111,482 17,019 90,510
--------- --------- --------- ---------
Cost of Sales 104,913 131,047 24,352 120,094
Operating Income (Loss) (98,138) (115,254) (14,301) (1,150)
Other Income (Expenses) -- -- 14,191 32,060
Miscellaneous Income 4,487 5,349
Interest & Other (12,892) (29,620) (7,714) (23,444)
NET INCOME BEFORE TAX (106,543) (139,525) (7,824) 7,466
State Income Tax Provision -- -- -- --
--------- --------- --------- ---------
NET INCOME (LOSS) $(106,543) $(139,525) $ (7,824) $ 7,466
========= ========= ========= =========
Avg. No. Shares O/S 942,387 942,387 942,387 942,387
EARNINGS (LOSS)
PER COMMON SHARE (0.11) (0.15) (0.01) 0.01
Dividend per Common Share None None None None
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3
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EXOTECH INCORPORATED AND SUBSIDIARY
STATEMENT OF CASH FLOWS FOR
NINE MONTHS ENDED MARCH 31,
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<Caption>
2002 2001
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CASH FLOWS FROM OPERATING TRANSACTIONS
Net Income (Loss) $ (139,525) $ 7,466
Add: Non cash Income Determinants
Depreciation and Amortization 436 427
Add (Deduct): Changes in Current Assets & Liabilities
(Increase) Decrease in Accounts Receivable 6,925 11,453
(Increase) Decrease in Other Current Assets (251) 1,737
(Increase) Decrease in Inventory 111,482 (491)
Increase (Decrease) in Accts. Payable (9,826) (5,701)
Increase (Decrease) in Payroll/Emp. Benefits (1,879) (34,250)
Increase (Decrease) in Accrued Interest 29,582 23,183
Increase (Decrease) in Deferred Revenue (4,265) (10,467)
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Cash PROVIDED BY or (USED) FOR Operating Transactions (7,321) 4,424
CASH FLOWS FROM FINANCING TRANSACTIONS:
Proceeds from Notes 21,750 --
Payment on Notes (14,782) (3,875)
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Cash PROVIDED BY or (USED FOR) Financing Transactions 6,968 (3,875)
CASH FLOWS FROM INVESTING TRANSACTIONS:
Deposits 206 --
Purchase of Equipment -- --
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Cash PROVIDED BY or (USED FOR) Investing Transactions 206 --
INCREASE (DECREASE) IN CASH (147) 549
CASH BALANCE - BEGINNING 1,329 1,921
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CASH BALANCE - ENDING $ 1,182 $ 2,470
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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
March 31, 2002 and June 30, 2001 and the results of operations and changes in
financial position for the three months ended March 31, 2002 and 2001 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 nine months ended March 31, 2002 and 2001.
NOTE 3.
Notes Payable at March 31, 2002 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 $263,094 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 March 31, 2002 the tenant's balance consists of a security deposit
of $2,100.
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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:
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<Caption>
--------------------------------------COMPARISON OF ---------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED
Mar 31 Dec 31 March 31 March 31 March 31 March 31
2002 2001 2002 2001 2002 2001
---- ---- ---- ---- ---- ----
Net Sales $ 6,775 $ 7,670 $ 6,775 $ 10,051 $ 15,793 $ 118,944
Direct Cost & Overhead (2,796) 9,132 (2,796) 4,693 10,971 23,103
General & Administrative Expense (3,773) 7,037 (3,773) 2,640 8,594 6,481
Inventory Cost 111,482 7,000 111,482 17,019 111,482 90,510
Cost of Sales 104,913 23,439 104,913 24,352 131,047 120,094
Interest & Other 12,892 (8,364) 12,892 7,714 (29,620) 23,444
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I. CHANGE IN FINANCIAL POSITION IN THE NINE MONTHS ENDED MARCH 31, 2002.
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In the nine months period ended March 31, 2002, an increase in the
deficit of working capital of $139,134 resulted from a net loss from
operations of $115,254 and non-fund charges of $24,273. The liability
for deferred revenue decreased to zero.
II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME NINE MONTH
PERIOD LAST YEAR.
Revenue for the nine months ended March 31, 2002, was $15,793 lower by
$103,151 (87%) than the results one year earlier. Cost of sales and
operating costs were increased in the most recent nine months by
$10,953 or 9% compared to the prior year. This was due in part to
reducing inventory by $103,982 to adjust to the lower of cost or
market. The result was an operating loss of $115,254 and a net loss of
$139,525 compared to net income of $7,466 in the nine 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 nine-month
periods. In the most recent nine months, manufacturing was limited to
Model 100BX Radiometers. This activity is reflected in the recent nine
months by the decrease of about $111,482 in inventory costs.
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.
7
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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 March 31, 2002 was $0, which was no
change from the backlog of the preceding quarter ended December 31, 2001.
ITEM 6 (B)
No reports on Form 8-K were filed in this quarter, ended March 31, 2002.
8
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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: AUGUST 20, 2002
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/S/ THEODORE J. PARRECO
- ---------------------------
Secretary
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