<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/ / QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION FROM ___________ TO __________.
For the transition period from ____________ to _______________
COMMISSION FILE NUMBER 0-2686
QUADRATECH, INC.
----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEVADA 95-4396848
- ----------------------------------------------- -----------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
10804 SOUTH LA CIENEGA BLVD., INGLEWOOD, CA 90306
- ----------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 310-649-0780
-------------------
N/A
---------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
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 / / No /X/
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At March 31, 1996, there were
outstanding 12,967,362 shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes / / No /X/
<PAGE> 2
PART I: FINANCIAL INFORMATION
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
ITEM 1: Financial Statements
Consolidated Balance Sheet as of March 31, 1996 (Unaudited) . . . . . . 2
Consolidated Statements of Operations for the three months
ended March 31, 1996 and 1995 (Unaudited) . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . 5
ITEM 2: Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . 6
PART II: OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 6
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
1
<PAGE> 3
QUADRATECH INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 31, 1995
<S> <C> <C> <C>
ASSETS
- ------
CURRENT ASSETS
Cash in Bank - checking $232 23.996
Cash in Savings 114,471
Trade Receivables $ 47,589
Less: Allowance for Doubtful 26,960 20,629 2,934
--------
Other Loans 1,915 3,000
Inventory 28,271 25,235
Prepaid Expenses 5,832
Deferred Income Taxes 10,667
---------
Security Deposit 4,530
Motor Vehicle 2,500
Total Current Assets $ 182,017 62,195
--------- --------
Plant & Equipment
Plant & Equipment $ 231,568
Less: Accum Deprec (29,739)
---------
201,829 32,753
Other Assets
Patents Marks & Copyrights $ 16,575
Less: Accum Amortization (386) 16,189 22,490
---------
Deposits 26,087
Deferred Income Taxes 565,062
---------
607,338
Total Assets $ 991,184 $ 116,938
========= =========
</TABLE>
2
<PAGE> 4
QUADRATECH INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 31, 1995
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 80,685 159,189
Accrued Expenses 150,815 786
Deposits 27,500
Loan Payable - Officer/Shareholder 195,762 100,000
Total Liabilities 454,762 259,975
Stockholders Equity
Common stock, $.001 par value
authorized 50,000,000 shares Issued
and outstanding as of March 31,
12,967,362 shares 12,967 10,836
Paid in Capital 1,659,620 598,244
Accumulated deficit (1,136,165) 752,117
-----------
536,422
Total Liabilities and Stockholders Equity $ 991,184 116,938
========== =========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
QUADRATECH INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED: MARCH 31, 1996 MARCH 31, 1995
<S> <C> <C>
Revenue $30,678 4,795
Cost of Sales 17,199 11,331
------------ ------------
Gross Profit: /Loss 13,479 (6,535)
Selling, General and Administrative Expenses 239,420 74,890
------------ ------------
Losses from Operations ($ 225,941) (81,425)
------------ ------------
Net Loss Per Share (.03) (.075)
Weighted Average Number of Common Shares Outstanding
at March 31, 12,825,098 10,836,459
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
THE ACCOMPANYING UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR INTERIM
FINANCIAL INFORMATION AND WITH THE INSTRUCTIONS TO FORM 10-QSB AND ITEM 310(b)
OF INITIAL CAP REGULATION S-B. 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.
NOTE B - EARNINGS PER SHARE
THE COMPANY CALCULATES EARNINGS PER SHARE BASED ON THE AVERAGE NUMBER OF SHARES
OUTSTANDING FOR THE PERIOD.
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
IN 1996, THE COMPANY FOCUSED ON MARKETING ITS FLUSH IT LITTER TO ADDITIONAL
SUPERSTORE CHAINS, ANIMAL SUPPLIES CO-OPS AND TO INDIVIDUAL PET SUPPLIES STORES
IN THE UNITED STATES AND CANADA.
THE COMPANY RECEIVED AN ADDITIONAL ORDER FROM PETCO ANIMAL SUPPLIES INC. IN
THE FIRST QUARTER FLUSH IT WAS PLACED ON THE SHELVES OF 87 PETCO SUPERSTORES IN
SOUTHERN CALIFORNIA. PETCO CURRENTLY OPERATES 255 PET SUPPLY RETAILS STORES,
INCLUDING 169 SUPERSTORES, IN 15 STATES AND THE DISTRICT OF COLUMBIA.
THE COMPANY MOVED ITS HEADQUARTERS DURING THE FIRST QUARTER OF THIS YEAR AND
INCURRED ADDITIONAL COSTS CONNECTED WITH THE MOVE AND REFURBISHMENT OF THE NEW
FACILITY.
TOTAL REVENUES FOR THE FIRST QUARTER WERE $30,678 AN INCREASE OVER FIRST QUARTER
OF 1995.
THE COMPANY'S NET LOSS OF $225,941 REPRESENTS AN INCREASE COMPARED TO FIRST
QUARTER 1995.
SELLING, GENERAL AND ADMINISTRATIVE COSTS ALSO ROSE IN COMPARISON TO FIRST
QUARTER 1995 AS A RESULT OF THE ACQUISITION OF ADDITIONAL PRODUCTION EQUIPMENT
AND ESTABLISHING SALES AND MARKETING DIVISION AND NETWORKS AND INCREASED
MARKETING COSTS ASSOCIATED WITH THE SALE OF PRODUCTS TO CUSTOMERS.
LIQUIDITY AND CAPITAL RESOURCES -
THE LIQUIDITY OF THE COMPANY AND ITS AVAILABLE CAPITAL RESOURCES HAVE IMPROVED.
THE INCREASES ARE PRINCIPALLY DUE TO THE SALE AND ISSUANCE OF STOCK FOR CASH OR
IN CANCELLATION OF INDEBTEDNESS.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS: NONE
(B) REPORTS ON FORM 8-K: NONE
6
<PAGE> 8
QUADRATECH, INC.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
QUADRATECH, INC.
---------------------------------
(Registrant)
Date: December 5, 1996 /s/ MARIA COMFORT
---------------------------------
Maria Comfort, Chief Executive Officer
Date: December 5, 1996 /s/ WILLIAM SNYDER
---------------------------------
William Snyder, Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET STATEMENT OF OPERATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH 1ST QUARTER 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 133,117
<SECURITIES> 0
<RECEIVABLES> 47,589
<ALLOWANCES> 26,960
<INVENTORY> 28,271
<CURRENT-ASSETS> 182,017
<PP&E> 838,906
<DEPRECIATION> 29,739
<TOTAL-ASSETS> 991,184
<CURRENT-LIABILITIES> 454,762
<BONDS> 0
0
0
<COMMON> 1,659,620
<OTHER-SE> (1,123,198)
<TOTAL-LIABILITY-AND-EQUITY> 991,184
<SALES> 30,678
<TOTAL-REVENUES> 30,678
<CGS> 17,199
<TOTAL-COSTS> 17,199
<OTHER-EXPENSES> 239,420
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (225,941)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
