-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fl0MsKUhtsbkI+tqZ9IDMYZua/qayokExOfcMgEoaOXARtgEdzlNohazhDnoximL SmW9q+gvj2y+LEJOG/WuTA== 0000849401-02-000001.txt : 20020414 0000849401-02-000001.hdr.sgml : 20020414 ACCESSION NUMBER: 0000849401-02-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADM TRONICS UNLIMITED INC/DE CENTRAL INDEX KEY: 0000849401 STANDARD INDUSTRIAL CLASSIFICATION: ADHESIVES & SEALANTS [2891] IRS NUMBER: 221896032 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17629 FILM NUMBER: 02535637 BUSINESS ADDRESS: STREET 1: 224 S PEGASUS AVE CITY: NORTHVALE STATE: NJ ZIP: 07647 BUSINESS PHONE: 2017676040 MAIL ADDRESS: STREET 1: 224 S PEGASUS AVE CITY: NORTHVALE STATE: NJ ZIP: 07647 10QSB 1 q123101b.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2001 OR [ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File No. 0-17629 ADM TRONICS UNLIMITED, INC. (Exact name of registrant as specified in its Charter) Delaware 22-1896032 (State or Other Jurisdiction (I.R.S. Employer Identifi- of Incorporation or organization) cation Number) 224-S Pegasus Ave., Northvale, New Jersey 07647 (Address of Principal Executive Offices) Issuer's Telephone Number, including area code: (201) 767-6040 Check whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for Such shorter period that the Issuer was required to file such reports), And (2) has been subject to the filing requirements for the past 90 days: YES X NO ______ State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date: 47,382,037 shares of Common Stock, $.0005 par value, as of February 4, 2002 ADM TRONICS UNLIMITED, INC. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements: Consolidated Balance Sheets - December 31, 2001 and March 31, 2001 2 Consolidated Statements of Operations - For the three months and nine months ended December 31, 2001 and 2000 3 Consolidated Statement of Changes in Stockholders' Equity - For the nine months ended December 31, 2001 3 Consolidated Statements of Cash Flows - For the nine months ended December 31, 2001 and 2000 4 Notes to Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 Part II. Other Information Item 1. Legal Proceedings 7 Item 6. Exhibits and Reports on Form 8-K 8 1 ADM TRONICS UNLIMITED, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) DECEMBER MARCH ASSETS 30, 2001 31, 2001 Current assets: Cash and equivalents $ 31,610 $ 113,458 Accounts receivable--trade, less allowance for doubtful accounts of $89,000 195,838 211,134 Inventories: Raw materials and supplies 432,644 186,550 Finished goods 43,442 43,478 Equipment held for sale 540,061 792,244 Other current assets 34,815 38,492 Total current assets 1,278,410 1,385,356 Property and equipment 76,005 101,143 Equipment in use and under lease agreements, net of accumulated depreciation of $497,060 and $391,272 respectively 460,157 581,782 Loan receivable from officer, bearing interest at 3% per annum, unsecured 55,091 58,991 Other assets 153,243 163,821 Escrow private placement subscription Deposits - contra - 210,500 Total assets 2,022,906 2,501,593 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable-trade 227,588 186,118 Accrued expenses and other 18,356 102,706 Notes payable 147,325 73,229 Total current liabilities 393,269 362,053 Note payable, long-term portion - 85,000 Escrow subscription deposits - contra - 210,500 Stockholders' equity 1,629,637 1,844,040 Total liabilities and stockholders' equity $2,022,906 $2,501,593 2 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2001 2000 2001 2000 Revenues $287,768 $428,701 $1,122,279 $1,490,187 Costs and expenses: Cost of sales (32,158) 283,757 503,888 782,039 Selling, general and Administrative 218,848 356,351 836,699 1,132,020 Total costs and expenses 186,690 640,108 1,340,587 1,914,059 Operating income (loss) 101,078 (211,407) (218,308) (423,872) Other income: Interest and other income 349 6,020 3,905 17,863 Loss before income taxes 101,427 (205,387) (214,403) (406,009) Income taxes - - - - Net profit (loss) 101,427 (205,387) (214,403) (406,009) Net income (loss) per common share $0.002 $(0.004) $(0.004) $(0.009) ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED DECEMBER 31, 2001 (UNAUDITED) CAPITAL IN EXCESS OF PAR PAR ACCUMULATED SHARES VALUE VALUE DEFICIT TOTAL Balance, March 31, 2001 47,382,037 $23,691 $6,763,618 $(4,943,269) $1,844,040 Net loss--For the nine months ended December 31, 2001 (214,403) (214,403) Balance, December 31, 2001 47,382,037 $23,691 $6,763,618 $(5,157,672) $1,629,637 3 ADM TRONICS UNLIMITED, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED DECEMBER 31, 2001 2000 Cash flows from Operating activities: Net loss $(214,403) $(406,009) Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation and amortization 141,507 186,761 Common stock options issued as compensation - 1,200 Changes in operating assets and liabilities: Accounts receivable-trade 15,296 86,208 Inventories (246,058) 45,946 Other current assets 3,677 7,999 Equipment in use or under lease agreements 128,188 (13,937) Equipment held for sale 252,183 58,316 Other assets (87,221) (8,063) Accounts payable 41,470 71,231 Accrued expenses and other (84,352) 226,379 Net cash flows provided by (used in) operating activities (49,713) 256,031 Cash flows from Investing activities: Purchases of property and equipment (25,131) (2,310) Repayments of loan to officer 3,900 3,800 Net cash flows provided by (used in) investing activities (21,231) 1,490 Cash flows from Financing activities: Borrowings on notes payable 10,000 (120,773) Notes payable long term (20,904) - Net cash flows provided by (used in) financing activities 10,904 (120,773) Net change in cash and cash equivalents $(81,848) $136,748 Cash and cash equivalents--beginning of year $113,458 $322,208 Cash and cash equivalents--end of period $ 31,610 $458,956 Supplemental disclosure of cash flow activities: Interest paid 1,546 26,272 4 ADM TRONICS UNLIMITED, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1-Basis of Presentation: The consolidated balance sheet at the end of the preceding fiscal year has been derived from the audited consolidated balance sheet contained in the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 2001 (the "Form 10-KSB") and is presented for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and changes in financial positions for all periods presented have been made. The results of operations for interim periods are not necessarily indicative of the operating results for the full year. Footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Form 10-KSB. Note 2. Segment Information Information about segment information is as follows: Nine Months Ended December 31, 2001: CHEMICAL MEDICAL TOTAL Revenues from external customers 517,585 604,694 1,122,279 Segment profit (loss) (65,373) (149,030) (214,403) Nine Months Ended December 31, 2000: Revenues from external customers 574,582 915,605 1,490,187 Segment profit (loss) (45,897) (360,112) (406,009) Three Months Ended December 31, 2001: Revenues from external customers 150,954 136,814 287,768 Segment profit (loss) 127,253 (25,776) 101,477 Three Months Ended December 31, 2000: Revenues from external customers 183,934 244,767 428,701 Segment profit (loss) 159,011 (364,398) (205,387) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At December 31, 2001 the Company had cash and equivalents of $31,610 as compared to $113,458 at March 31, 2001. This decrease was the result of net cash flows used in operating activities of $49,713 coupled with cash used in investing activities of $21,231 and financing activities of $10, 904. Operating Activities Net cash flows used in operating activities were $49,713 as compared to cash flows of $256,031 for the nine months ended December 31, 2001 and 2000, respectively. Cash flows used in operating activities primarily resulted from the net loss for the period of $214,403, a reduction in other assets and accrued expenses of $171,573, collectively offset by an increase in inventories and equipment of $134,313, depreciation and amortization of $141,507 and accounts payable of $41,470. Investing Activities Cash flows provided by investing activities consisted of repayments of the officer loan offset by cash expenditures of $25,131 for the purchase of equipment. Financing Activities Cash flows used in financing activities primarily consisted of $20,904 reduction in long term notes payable offset by an increase in notes payable of $10,000. The Company does not have any material external sources of liquidity or unused sources of funds. Results of Operations Quarter Ended December 31, 2001 Revenues Revenues were $287,768 in 2001 as compared to $428,701 in 2000 representing a decrease of $140,933 or 32%. Revenues from the Company's medical electronics activities decreased $107,953 due to a reduction in revenues in contract manufacturing and chemical revenues decreased $32,980. Gross Profit Gross profit of $319,926 in 2001 as compared to $144,944 in 2000 was $174,982 or 120% above the gross profit in 2000. The increase in gross profit margin was primarily due the reduction of revenues from contract manufacturing in the medical segment which produce lower gross margins and an adjustment to inventory which reduced the cost of goods sold in this quarter. 6 Operating Income (Loss) Operating income in 2001 was $101,078 compared to a loss of ($211,407) in 2000. Selling, general and administrative expenses decreased by $137,503 primarily due to a reduction in personnel and reduced expenses coupled with an adjustment to inventory which reduced cost of goods sold. Other Income Other income in 2001 was $349 as compared to $6,020 in 2000. The decrease was due to a decrease in interest income from reduced amounts invested. Results of Operations Nine Months Ended December 31, 2001 Revenues Revenues were $1,122,279 as compared to $1,490,187 in 2000 representing a decrease of $367,908 or 24%. Revenues from the Company's medical electronics activities decreased $310,911 due to reduced revenues from contract manufacturing and chemical revenues decreased $56,997. Gross Profit Gross profit of $618,391 in 2001 as compared to $708,148 in 2000 was $89,757 or 12% lower than the gross profit in 2000. Gross profit was 55% of revenues in 2001 and 47% in 2000. The increase in gross profit margin is due to the mix of product sales with higher sales of products with a higher gross margin. Specifically, revenues from contract manufacturing in the medical segment decreased which produces lower gross margins. Operating Loss Operating loss was $218,308 in 2001 compared to $423,872 in 2000. Selling, general and administrative expenses decreased by $295,321 due to a reduction in personnel and other expenses. Other Income Other income of $3,905 in 2001 decreased $13,958 from $17,863 in 2000, due to a decrease in interest income from reduced amounts invested. Part II - Other Information Item 1. Legal Proceedings On November 20, 2001 in the Supreme Court of the State of New York, County of Rockland, Millennium Medical Research, LLC ("MMR") filed an Order to Show Cause against Immuno-Therapy Corporation ("ITC"), a subsidiary of the Registrant, and Thomas Petrie, President of ITC. The Court granted a temporary restraining order prohibiting ITC from transfering the possession of the ITC Hemo-Irradiator medical device to any party other than MMR. MMR 7 is seeking monetary damages for alleged non-compliance with contractural obligations by ITC. The Registrant believes such allegations are without merit. On December 7, 2001 an answer, counterclaims and third-party complaints were filed by ITC, Precision Assembly Corporation and Pegasus Marketing LLC against MMR seeking, among other things, a restraining order, compensatory and punitive damages, against MMR and Joseph Lorber, Esq., managing member of MMR. On February 5, 2002 the Court denied MMR's motion for a preliminary injunction and vacated the temporary restraining order against ITC. Item 6. Exhibits and Reports on Form 8-K (a) Not applicable. (b) A Report on Form 8-K dated December 18, 2001 was filed reporting Item 5. Other Events. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ADM Tronics Unlimited, Inc. By:\s\ Andre' DiMino Andre' DiMino Principal Financial Officer Dated: Northvale, New Jersey February 4, 2002 8 -----END PRIVACY-ENHANCED MESSAGE-----