================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 of 15(d) of the Securities Exchange Act of 1934 For Quarter Ended December 31, 2004 Commission File Number 0-16397 APPLIED SPECTRUM TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Minnesota 41-1419457 (State or other jurisdiction of IRS Employer Identification Number incorporation or organization) c/o Norwood Venture Corp. 65 Norwood Avenue Upper Montclair, NJ 07043 Registrant's Telephone Number Including Area Code (973) 783-1117 Not Applicable (Former name, former address and former fiscal year, if changed from last report) 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 [_] The number of shares of registrant's Common Stock, par value $.01 per share, outstanding as of January 31, 2005, was 2,953,941. ================================================================================ APPLIED SPECTRUM TECHNOLOGIES, INC. INDEX PAGE ---- Part I. Financial Information Item 1. Financial Statements (Unaudited) ---------------------------- Statements of Operations for the three 3 months ended December 31, 2004 and 2003 Balance Sheets as of December 31, 2004 4 and September 30, 2004 Statements of Cash Flows for the 5 three months ended December 31, 2004 and 2003 Notes to Financial Statements - 6 December 31, 2004 Item 2. Management's Discussion and Analysis of 7 ----------------------------------------------- Financial Condition and Results of Operations --------------------------------------------- Part II. Other Information 8 Signature 9 2 PART 1. FINANCIAL INFORMATION APPLIED SPECTRUM TECHNOLOGIES, INC. STATEMENT OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31 ------------------------- 2004 2003 ---------- ---------- REVENUES Net sales $ -- $ -- Sublicensing revenues -- -- Total revenues -- -- Cost of product sold -- -- ---------- ---------- Gross profit -- -- General and administrative expense -- -- ---------- ---------- Operating profit (loss) -- -- Interest expense -- -- Interest income 90 41 Other income (expense) -- -- ---------- ---------- Net profit (loss) $ 90 $ 41 Net profit (loss) per share $ 0.00 $ 0.00 Weighted average number of shares outstanding 2,953,941 2,953,941 See notes to financial statements 3 APPLIED SPECTRUM TECHNOLOGIES, INC. BALANCE SHEETS (UNAUDITED) DECEMBER 31, SEPTEMBER 30, 2004 2004 ------------ ------------ ASSETS CURRENT ASSETS Cash $ 26,127 $ 26,580 Other -- -- ------------ ------------ Total current assets 26,127 26,580 PROPERTY AND EQUIPMENT Equipment at fair market value -- -- ------------ ------------ $ 26,127 $ 26,580 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 7,491 $ 8,034 Other accrued expenses 7,500 7,500 ------------ ------------ Total current liabilities $ 14,991 $ 15,534 SHAREHOLDERS' EQUITY Common Stock, par value $.01 per share authorized 10,000,000 shares, issued and outstanding - 2,953,941 29,539 29,539 Additional paid-in capital 16,062,413 16,062,413 Accumulated deficit (16,080,816) (16,080,906) ------------ ------------ 11,136 11,046 ------------ ------------ $ 26,127 $ 26,580 See notes to financial statements 4 APPLIED SPECTRUM TECHNOLOGIES, INC. STATEMENT OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31 -------------------------- OPERATING ACTIVITIES 2004 2003 ---------- ---------- Net profit (loss) $ 90 $ 41 Net cash flow from (used for) working capital (543) (751) ---------- ---------- Net cash from operating activities (453) (710) INVESTING ACTIVITIES -- -- Net cash from investing activities -- -- ---------- ---------- FINANCING ACTIVITIES Proceeds from issuance of stock -- -- ---------- ---------- Net cash from financing activities -- -- INCREASE (DECREASE) IN CASH (453) (710) Cash beginning of period 26,580 28,894 ---------- ---------- CASH END OF PERIOD $ 26,127 $ 28,184 ---------- ---------- See notes to financial statements 5 APPLIED SPECTRUM TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE A -- BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 2004. NOTE B -- WEIGHTED AVERAGE SHARES Weighted average number of shares includes shares of common stock outstanding during the period. Outstanding stock options and warrants are not included in the loss per share calculations as they are considered anti-dilutive. NOTE C -- SIGNIFICANT EVENTS At a Special Shareholders' Meeting on November 17, 2000, the Shareholders revoked the Plan of Dissolution. In August, 2001 a liquidating dividend of approximately $212,000 was paid pro-rata to shareholders. NOTE D -- OWNERSHIP On January 20, 1995, Norwood Venture Corp. (Norwood), the Company's major shareholder, exercised warrants to 957,877 shares of common stock at a price of $.01 per share. Following the exercise, Norwood owned 2,282,564 shares or 77.27% of the Company. 6 APPLIED SPECTRUM TECHNOLOGIES, INC. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 - ------------------------------------------------------- Revenues - -------- The Company was inactive and had no sales revenue during the period. Expenses - -------- None. Interest Income - --------------- Interest income of $90 in the period was earned on cash balances. Capital Resources and Liquidity - ------------------------------- The Company's cash position was reduced by $453 during the period. 7 Part II. Other Information None. 8 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the period ended December 31, 2004 to be signed on its behalf by the undersigned thereunto duly authorized. APPLIED SPECTRUM TECHNOLOGIES, INC. Date: January 27, 2005 /s/ Mark R. Littell ---------------------------- Mark R. Littell Chief Executive Officer /s/ Mark R. Littell ---------------------------- Mark R. Littell Director