10-Q 1 a2087823z10-q.txt 10-Q 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.

~~PART~~CLASS: ICOMMON ~~FINANCIAL INFORMATION PAGE NO. CONSOLIDATED CONDENSED BALANCE SHEET DECEMBER 31~~STOCK, ~~2001~~PAR ~~AND~~VALUE ~~JUNE 30, 2001~~$0.~~.............................~~10 ~~2 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS~~ ----------------------------- ~~SIX~~OUTSTANDING ~~MONTHS~~AT ~~ENDED~~MARCH ~~DECEMBER~~ 31 , ~~2001~~2002 ~~AND 2000....................................... 3 STATEMENT OF CASH FLOWS FOR THREE MONTHS ENDED DECEMBER 31~~942,387 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-------

EXOTECH INCORPORATED INDEX

~~ASSETS~~PART ~~DECEMBER~~I ~~31,~~FINANCIAL ~~JUNE~~INFORMATION ~~30,~~PAGE ~~2001 2001 ------------------- ----------- (Unaudited) CURRENT ASSETS Accts~~NO. ~~Receivable,~~CONSOLIDATED ~~Net~~CONDENSED $BALANCE ~~265~~SHEET $MARCH 1331,~~615~~ ~~Inventories~~2002 ~~Work~~AND inJUNE ~~Process 189~~30,~~357~~ ~~196,857~~2001................................. ~~Raw~~2 ~~Materials~~CONSOLIDATED ~~32,625~~CONDENSED ~~32,625~~STATEMENT ~~Finished~~OF ~~Goods~~OPERATIONS ~~14,000 14,000 Cash and Other Current Assets 3,150 1,078~~ -~~--------~~ ~~---------~~SIX ~~Total~~MONTHS ~~Current~~ENDED ~~Assets~~MARCH ~~$239~~31,~~397~~ ~~$258,175~~2002 ~~PROPERTY, PLANT~~ AND ~~EQUIPMENT~~2001.......................................... ~~NET~~3 ~~1,402~~STATEMENT ~~1,696~~OF ~~OTHER~~CASH ~~NON~~FLOWS ~~CURRENT~~FOR ~~ASSETS~~THREE ~~3,880~~MONTHS ~~3,880~~ENDED ~~--------~~MARCH ~~-------- TOTAL ASSETS $244~~31,~~679~~ ~~$263,751~~2002 ~~======== ======== LIABILITIES~~ AND ~~SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accts~~2001............................. ~~Payable~~4 &NOTES ~~Other~~TO ~~Accrued~~CONSOLIDATED ~~Expenses~~CONDENSED $FINANCIAL ~~12,550~~STATEMENTS............................................. ~~$10,391~~5 ~~Other~~MANAGEMENT'S ~~Current~~DISCUSSION ~~Liabilities~~AND ~~415,330~~ANALYSIS ~~400,612~~OF ~~Notes~~CONSOLIDATED ~~Payable~~CONDENSED ~~415,594~~STATEMENT ~~411,126~~OF ~~-------~~OPERATIONS.................................................... ~~-------~~6 ~~Total~~PART ~~Current~~II ~~Liabilities~~OTHER ~~$843,474~~INFORMATION ~~$822,129~~OTHER ~~SHAREHOLDERS~~FINANCIAL ~~EQUITY~~INFORMATION...................................... ~~Common~~8 ~~Stock, Par Value $~~SIGNATURES.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) --------- --------- Total Shareholders' Equity (598,795) (558,378) TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $244,679 $263,751 ======== ========9

EXOTECH INCORPORATED CONSOLIDATED BALANCE SHEET ASSETS

~~2001~~MARCH ~~2000 3 Mos. 6 Mos. 3 Mos. 6 Mos. ENDED ENDED REVENEUE: 12/~~31, ~~12/31~~JUNE ~~12/31~~30, ~~12/31~~2002 2001 ----- --------- ----- ------ ~~Contract~~(Unaudited) ~~Sales~~CURRENT ~~7,670~~ASSETS 9Accounts Receivable,~~019~~ 42Net $ 6,~~776~~690 ~~108~~$ 13,~~893~~615 ~~EXPENSES~~Inventories ~~Direct~~Work ~~Labor~~in ~~132~~Process 132,000 ~~270 2~~196,~~113~~857 ~~Overhead~~Raw ~~8,990~~Materials ~~13,388~~0 232,~~241~~625 9Finished Goods 0 14,~~373~~000 ~~Materials~~Cash 10and 68Other Current Assets 1,~~398~~182 21,~~000~~329 ~~Other~~----------- ~~Direct Costs~~ ----------- ~~115~~Total ~~4,043~~Current ~~4,924~~Assets ~~General~~$ &139,872 ~~Administrative~~$ 7258,~~307~~426 12PROPERTY,~~366~~ PLANT AND EQUIPMENT NET 1,~~822~~260 31,~~841~~696 ~~Inventory~~OTHER ~~7,000~~NON ~~7,500~~CURRENT 43ASSETS 3,~~272~~674 733,~~491~~629 ----------- ----------- TOTAL ASSETS $ 144,806 $ 263,751 =========== =========== 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 ----------- ----------- ~~Cost~~Total ofCurrent ~~Sales~~Liabilities ~~23,439~~$ 33842,~~569~~709 ~~53,046~~$ 95822,~~742~~129 ~~Operating~~SHAREHOLDERS ~~Income~~EQUITY ~~(Loss)~~Common ~~(15~~Stock,~~769)~~ ~~(24,550)~~Par (Value $.10 per share; 1,~~270)~~500,000 13shares authorized; 970,~~151~~135 ~~Other~~issued; ~~Income~~942,387 ~~(Expenses)~~outstanding --97,014 97,014 Paid-in-Surplus 171,~~867~~169,645 171,~~869~~169,645 ~~Interest~~Deficit ~~& Other~~ (81,~~364) (15~~852,~~867~~142) (71,~~860) (15~~712,~~730~~617) ~~NET~~Treasury ~~INCOME~~Stock ~~BEFORE TAX~~ (2427,~~133~~748 shares) (40112,~~417~~420) (~~263~~112,420) ~~15,290 State Income Tax Provision~~ -- -- -- -- --- ----- ------ Total Shareholders' Equity (697,903) (558,378) -- --------- ----------- ~~NET~~TOTAL ~~INCOME~~LIABILITIES ~~(LOSS)~~& ~~(24,133)~~SHAREHOLDERS' ~~(40,417)~~EQUITY ~~(263)~~$ 15144,~~290~~806 ~~Avg.~~$ ~~No. Shares O/S 942~~263,~~387~~751 ~~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~~===========

See accompanying Notes to Consolidated Condensed Financial Statements. 2 EXOTECH INCORPORATED CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

2002 2001 ~~2000~~3 ~~----~~Mos. ~~----~~9 ~~CASH~~Mos. ~~FLOWS~~3 ~~FROM~~Mos. ~~OPERATING~~9 ~~TRANSACTIONS~~Mos. ENDED ENDED REVENEUE: 03/31 03/31 03/31 03/31 ----- ----- ----- -----~~------------------~~ ~~Net~~Contract ~~Income~~Sales ~~(Loss)~~ $~~(40~~ 6,~~417)~~775 $ 15,~~290~~793 ~~Add:~~$ ~~Non~~10,051 ~~cash~~$ ~~Income~~118,944 ~~Determinants~~EXPENSES ~~Depreciation~~Direct ~~and~~Labor ~~Amortization~~-- ~~284~~132 ~~284~~974 ~~Add~~3,087 ~~(Deduct):~~Overhead ~~Changes in Current Assets & Liabilities~~ (~~Increase~~2,796) ~~Decrease~~10,656 in3,719 ~~Accounts Receivable~~ 13,~~350~~092 ~~(925)~~Materials ~~(Increase)~~-- ~~Decrease~~68 in-- ~~Prepaid Expenses 524 1~~2,~~296~~000 ~~(Increase)~~Other ~~Decrease~~Direct inCosts ~~Inventory~~-- ~~7,500~~115 (-- 3,~~989)~~351 ~~Increase~~Travel ~~(Decrease)~~-- ~~in Accts. Payable~~ 1,~~384~~573 ~~5,739~~General ~~Increase~~& Administrative (~~Decrease~~3,773) in8,594 ~~Payroll/Emp. Benefits (~~2,~~070)~~640 ~~(31~~6,~~961)~~481 ~~Increase~~Inventory ~~(Decrease)~~111,482 in111,482 ~~Accrued Interest 16~~17,~~690~~019 1590,~~568~~510 ~~Increase~~--------- ~~(Decrease) in Deferred Revenue 107~~ -0-------- --------- --------- ~~Cash~~Cost ~~PROVIDED~~of BYSales or104,913 ~~(USED)~~131,047 ~~FOR~~24,352 120,094 Operating ~~Transactions~~Income (2Loss) (98,~~648~~138) (115,254) (14,301) (1,~~302~~150) ~~CASH~~Other ~~FLOWS~~Income ~~FROM~~(Expenses) ~~FINANCING~~-- ~~TRANSACTIONS:~~-- ~~Proceeds~~14,191 ~~from~~32,060 ~~Notes~~Miscellaneous 19Income 4,~~250~~487 05,349 ~~Payment~~Interest on& ~~Notes~~Other (1412,~~781~~892) (229,~~305~~620) ~~--------~~(7,714) ~~--------~~(23,444) ~~Cash~~NET ~~PROVIDED~~INCOME BYBEFORE orTAX (~~USED FOR~~106,543) ~~Financing Transactions 4~~(139,~~469~~525) (27,~~305~~824) ~~CASH~~7,466 ~~FLOWS~~State ~~FROM~~Income ~~INVESTING~~Tax ~~TRANSACTIONS:~~Provision ~~Deposits~~-- -0- -0- ~~Purchase~~-- ~~of Equipment~~ -0-------- -0-------- --------- --------- ~~Cash~~NET ~~PROVIDED~~INCOME BY(LOSS) or$(106,543) $(~~USED~~139,525) ~~FOR~~$ (7,824) ~~Investing~~$ ~~Transactions~~7,466 ~~-0-~~========= ~~-0-~~========= ~~INCREASE~~========= ~~(DECREASE)~~========= INAvg. ~~CASH~~No. 1Shares O/S 942,~~821~~387 (1942,~~003)~~387 ~~CASH~~942,387 ~~BALANCE~~942,387 -EARNINGS ~~BEGINNING~~(LOSS) ~~1,329~~PER ~~1,921~~COMMON ~~--------~~SHARE ~~--------~~(0.11) ~~CASH~~(0.15) ~~BALANCE~~(0.01) -0.01 ~~ENDING~~Dividend $per ~~3,150~~Common $Share ~~918~~None None None None

3 EXOTECH INCORPORATED AND SUBSIDIARY STATEMENT OF CASH FLOWS FOR NINE MONTHS ENDED MARCH 31,

~~COMPARISON~~2002 OF2001 ---- ---- 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) --------- ---------~~-------------------------------------------~~ ~~THREE~~Cash ~~MONTHS~~PROVIDED ~~ENDED~~BY ~~THREE~~or ~~MONTHS~~(USED) ~~ENDED~~FOR ~~SIX~~Operating ~~MONTHS~~Transactions ~~ENDED~~(7,321) ~~31-Dec~~4,424 ~~30-Sep~~CASH ~~31-Dec~~FLOWS ~~31-Dec~~FROM ~~31-Dec~~FINANCING ~~31-Dec~~TRANSACTIONS: ~~2001~~Proceeds ~~2001~~from ~~2001~~Notes ~~2000~~21,750 ~~2001 2000~~ ---- ~~----~~Payment on Notes (14,782) (3,875) ---- ----- ---- ----- ~~Net~~Cash ~~Sales~~PROVIDED ~~$9,019~~BY ~~$7,670~~or ~~$1,349~~(USED ~~$42,776~~FOR) $Financing 9Transactions 6,~~019~~968 ~~$108~~(3,~~893~~875) ~~Direct~~CASH ~~Cost~~FLOWS &FROM ~~Overhead~~INVESTING ~~13,703~~TRANSACTIONS: ~~9,132~~Deposits ~~4,571~~206 ~~7,952~~-- ~~13,703~~Purchase ~~18,410~~of ~~General~~Equipment &-- ~~Administrative~~-- ~~Expense~~--------- ~~12,366~~--------- ~~7,307~~Cash ~~5,059~~PROVIDED ~~1,822~~BY ~~12,366~~or ~~3,841~~(USED ~~Inventory~~FOR) ~~Cost~~Investing ~~7,500~~Transactions ~~7,000~~206 ~~500~~-- ~~43,272~~INCREASE ~~7,500~~(DECREASE) ~~73,491~~IN ~~Cost~~CASH of(147) ~~Sales~~549 ~~33,569~~CASH ~~23,439~~BALANCE ~~10,130~~- ~~53,046~~BEGINNING 331,~~569~~329 951,~~742~~921 ~~Interest~~--------- &--------- ~~Other~~CASH ~~(15,867)~~BALANCE ~~(8,364)~~- ~~(7,503)~~ENDING ~~10,009~~$ ~~(15~~1,~~867)~~182 $ 2,~~139~~470

4 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. 5 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:

6 I. CHANGE IN FINANCIAL POSITION IN THE NINE MONTHS ENDED MARCH 31, 2002. --------------------------------------------------------------------- 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 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 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 ------------------------------- /S/ THEODORE J. PARRECO --------------------------- Secretary 9

Filing Compare · EXOTECH INC