UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
Commission file number 2-92453-S
ACTEK, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1228719
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
12740 38th N. E.
Seattle, Washington
(Address of principal executive offices)
98125
(Zip Code)
(206) 363-0217
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark 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
requirements for the past 90 days.
Yes X No
---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 31, 2001:
(Common Stock)
65,654 492
TABLE OF CONTENTS
PART I
PAGE
----
ITEM 1 Financial Statements
3
Statements of Balance Sheets as of March 31, 2001
And June 30, 2000 3
Statements of Operations for the Three Month
Period Ended March 31, 2001 4-5
Statements of Cash Flows for the for the Three Month
Period Ended March 31, 2001 6
Notes on Financial Statements 7
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II
ITEM 1 Legal Proceedings 9
ITEM 2 Changes in Securities 9
ITEM 3 Defaults Upon Senior Securities 9
ITEM 4 Submission of Matters to a Vote of Security Holders 9
ITEM 5 Other Information 9
ITEM 6 Exhibits and Reports on Form 8-K 9
Page 2 of 9
ACTEK, INC.
BALANCE SHEETS
March 31, 2001 June 30, 2000
--------------- ---------------
ASSETS
CURRENT ASSETS
Cash $ 2,598 $ 64,155
Accounts receivable, net of
allowance for doubtful accounts 144,072 143,132
Inventory, net of reserve for
obsolete inventory 361,402 236,117
Employee advances 147,058 145,341
--------------- ---------------
TOTAL CURRENT ASSETS 655,129 588,745
--------------- ---------------
PROPERTY AND EQUIPMENT
Equipment 145,935 145,157
Vehicles 30,574 30,574
Leasehold improvements 6,434 6,434
Tooling 96,271 96,271
Accumulated depreciation (254,771) (244,474)
--------------- ---------------
TOTAL PROPERTY AND EQUIPMENT 24,444 33,962
--------------- ---------------
OTHER ASSETS
Investments (Bonds & Securities) 48,094 48,094
Deferred income taxes 81,487 81,487
--------------- ---------------
TOTAL OTHER ASSETS 129,581 129,581
--------------- ---------------
TOTAL ASSETS $ 809,154 $ 752,288
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ - $ 3,879
Accounts payable 167,245 48,220
Accrued payroll and related liabilities 900 27,956
Notes payable - current portion 4,772 4,772
--------------- ---------------
TOTAL CURRENT LIABILITIES 172,918 84,827
--------------- ---------------
LONG-TERM DEBT
Notes payable, net of current portion 118,150 121,754
--------------- ---------------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value;
100,000,000 shares authorized,
65,654,492 issued and outstanding 65,654 65,654
Additional paid-in capital 718,495 718,495
Stock warrants 4,000 4,000
Accumulated deficit (270,227) (241,035)
Accumulated other comprehensive income 163 (1,407)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 518,086 545,707
--------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 809,154 $ 752,288
=============== ===============
Page 3 of 9
ACTEK, INC.
STATEMENTS OF OPERATIONS
For the 3 month For the 9 month For the Fiscal
Period Ending Period Ending Year Ending
March 31, 2001 March 31, 2001 June 30 2000
--------------- --------------- --------------
REVENUES $ 314,243 $ 792,229 $ 1,232,238
--------------- --------------- --------------
COST OF SALES
Materials 16,477 249,940 466,745
Direct labor 54,307 163,547 255,355
Occupancy expense 3,347 9,090 11,403
Freight 2,927 8,576 21,694
Depreciation & amortization 574 1,721 2,212
Supplies 2,437 5,053 7,556
Overhead Allocation 5,061 14,315 -
--------------- --------------- --------------
Total Cost of Sales 85,129 452,241 764,965
--------------- --------------- --------------
GROSS PROFIT 229,114 339,988 467,273
--------------- --------------- --------------
GENERAL AND ADMINISTRATIVE EXPENSES
Depreciation and amortization 2,846 8,576 9,895
Salaries, wages and benefits 75,751 192,626 189,028
Legal and professional 20,431 53,523 29,715
Insurance 8,152 16,918 26,352
Bad debts - 10 15,851
Advertising 15,597 64,135 36,962
Occupancy 3,377 9,251 11,403
Other administrative expenses 6,906 23,243 43,305
--------------- --------------- --------------
Total General and
Administrative Expenses 133,060 368,282 362,511
--------------- --------------- --------------
OPERATING INCOME 96,054 (28,294) 104,762
--------------- --------------- --------------
OTHER INCOME (EXPENSE)
Dividend and interest income 20 7,467 16,920
Miscellaneous income 3 3 25
Interest Income/(expense) (5,618) (10,965) (13,979)
--------------- --------------- --------------
Total Other Income/(Expense) (5,595) (3,494) 2,966
--------------- --------------- --------------
INCOME BEFORE INCOME TAXES 90,460 (31,789) 107,728
--------------- --------------- --------------
INCOME TAXES
Current - - (20,084)
Deferred - - -
--------------- --------------- --------------
Total income taxes - - (20,084)
--------------- --------------- --------------
NET INCOME $ 90,460 $ (31,789) $ 87,644
=============== =============== ==============
Page 4 of 9
ACTEK, INC.
STATEMENTS OF OPERATIONS
(CONTINUED)
For the 3 month For the 9 month For the Fiscal
Period Ending Period Ending Year Ending
March 31, 2001 June 30, 2000 June 30 2000
--------------- --------------- --------------
COMPREHENSIVE INCOME $ 90,460 $ (31,789) $ 87,644
BASIC NET INCOME PER
COMMON SHARE $ nil $ nil $ nil
DILUTED NET INCOME PER
COMMON SHARE $ nil $ nil $ nil
WEIGHTED AVERAGE NUMBER OF
BASIC COMMON SHARES
OUTSTANDING 65,654,492 65,654,492 65,654,492
WEIGHTED AVERAGE NUMBER OF
DILUTED COMMON SHARES
OUTSTANDING 69,654,492 69,654,492 69,654,492
Page 5 of 9
ACTEK, INC.
STATEMENT OF CASH FLOWS
For the 3 month For the 9 month For the Fiscal
Period Ending Period Ending Year Ending
March 31, 2001 March 31, 2001 June 30 2000
--------------- --------------- --------------
Cash flows from operating
activities:
Net income $ 90,460 $ (31,789) $ 87,644
--------------- --------------- --------------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 3,419 10,297 12,107
Deferred income taxes - - -
Changes in assets and
liabilities:
Accounts receivable (62,804) (939) 51,562
Inventory (125,285) (125,286) (53,891)
Employee advances 8,072 (1,717) (31,830)
Prepaid expenses - - -
Other assets - - -
Bank overdraft - (3,879) (26,769)
Accounts payable 54,859 119,026 (20,851)
Accrued expenses 467 (22,887) 1,684
Interest payable - - 19
--------------- --------------- --------------
Net cash provided by
operating activities (30,812) (57,174) 19,675
--------------- --------------- --------------
Cash flows from investing
activities:
Purchase of equipment - (779) (10,444)
Purchase of investments - 0 (39,564)
--------------- --------------- --------------
Net cash used in investing
Activities - (779) (50,008)
--------------- --------------- --------------
Cash flows from financing
activities:
Payments of notes payable (1,302) (3,604) (3,192)
--------------- --------------- --------------
Net cash used by financing
Activities (1,302) (3,604) (3,192)
--------------- --------------- --------------
NET INCREASE (DECREASE) IN CASH (32,114) (61,557) (33,525)
CASH, BEGINNING OF PERIOD 34,712 64,155 43,533
--------------- --------------- --------------
CASH, END OF PERIOD $ 2,598 $ 2,598 $ 10,008
=============== =============== ==============
Page 6 of 9
ACTEK, INC.
(UNAUDITED) Notes to Financial Statements
- -----------
The financial statements of ACTEK, INC. included herein, have been prepared
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally included in
financial statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted, ACTEK, INC. believes that the
disclosures are adequate. These financial statements should be read in
conjunction with the financial statements and notes thereto included in ACTEK,
INC.'s annual report on Form10-K for the fiscal year ended June 30, 2000.
The financial statements included herein reflect all normal recurring
adjustments that, in the opinion of management, are necessary for a fair
presentation. The results for interim periods are not necessarily indicative of
trends or of results to be expected for a full year.
The most significant change reflected in this report, compared to previous
reports is the increase in the company's inventory which is $361,402 compared to
$236,117 on June 30, 2000. This amount is based on an interim physical inventory
taken on March 31, 2001, which resulted in a write-up of inventory previously
expensed during the first two quarters of this fiscal year.
Page 7 of 9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company realized gross revenues of $314,243 in third quarter of fiscal year
2001 for a total of $792,229 for the first nine months of fiscal year 2001,
which, when annualized, would be $1,056,305 compared to $1,232,238 in fiscal
year 2000. The Company realized net income of $90,460 in the third quarter of
fiscal year 2001. There was a $125,285 write-up of inventory previously expensed
through cost of goods sold in the first six months reflecting the results of an
interim physical inventory taken on March 31, 2001. Net loss for the first nine
months of fiscal year 2001 is ($31,789). Net income for fiscal year 2000 was
$87,644.
Both the growth in inventory & the Net loss in operating results reflect changes
in the marketplace during this fiscal year & our investments in the future
growth of the company. The markets for our products have been undergoing what
management believes to be a short-term down turn. The company has been
developing new versions of our products for some time & in preparation for
introduction of these products we have expended moneys for both development
expenses & for additional inventory.
At March 31, 2001, the Company has $655,129 in current assets including cash in
the amount of $2,598. Current liabilities were $172,918, although $50,000 of
that will be restructured into long-term debt after March 31. The Company's
working capital balance is $482,211 at March 31, 2001 compared to $503,918 at
June 30, 2000, which management believes preserves the Company in a good
financial position.
8 of 9
PART II
ITEM 1 LEGAL PROCEEDINGS
NONE
ITEM 2 CHANGES IN SECURITIES
NONE
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5 OTHER INFORMATION
NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
NONE
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ACTEK, INC.
-----------
(Registrant)
/s/ Frederick E. Graham /s/ Jeretta C. Graham
____________________________ ____________________________
Frederick E. Graham Jeretta C. Graham
President and Director Secretary and Director
May 16, 2001 May 16, 2001
______________________________ ______________________________
Date Date
Page 9 of 9