<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended March 31, 1996
Commission file number 0-27344
HIGHTEC, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 52-0894692
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4190 Bonita Rd. Suite 105, Bonita CA 91902
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(Address of Principal Executive Offices)
(619) 297-2717
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(Issuer's Telephone Number, Including Area Code)
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(Former Name, Former Address and Former Fiscal Year, If Changed
Since Last Report)
Check whether the issuer: (1) 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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
------- -------
As of March 31, 1996 Hightec, Inc. had 7,592,050 shares of common stock
outstanding.
<PAGE> 2
ITEM 1
FINANCIAL STATEMENTS
<PAGE> 3
<TABLE>
<CAPTION>
HIGHTEC, INC.
CONSOLIDATED BALANCE SHEET
March 31, June 30,
1996 1995
------------- -----------
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 24,762 $ 3,542
PROPERTY AND EQUIPMENT,
less $21,844, of accumulated depreciation -- --
----------- -----------
$ 24,762 $ 3,542
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Income taxes payable $ 800 $ --
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock - $.001 par,
50,000,000 shares authorized, 7,992,050
issued and outstanding 7,592 7,592
Paid in Capital 1,534,951 1,534,951
Retained (Deficit) (1,518,581) (1,539,001)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 23,962 3,542
----------- -----------
$ 24,762 $ 3,542
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
<TABLE>
<CAPTION>
HIGHTEC, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months For the Nine Months
Ending March 31, Ending March 31, For the year
--------------------------- --------------------------- Ending June 30,
1996 1995 1996 1995 1995
-------- ---------- -------- -------- ---------
(Unaudited) (Unaudited) (Audited)
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales $ 25,784 $ 470 $ 36,428 $ 31,320 $ 31,562
Cost of goods sold 3,870 - 13,128 22,613 26,505
-------- ---------- -------- -------- ---------
GROSS PROFIT 21,914 470 23,300 8,707 5,057
OPERATING EXPENSES:
General and administrative 73 75 2,080 748 1,169
-------- ---------- -------- -------- ---------
Income from operations 21,841 395 21,220 7,959 3,888
TAXES ON INCOME 800 800 800
-------- ---------- -------- -------- ---------
NET INCOME $ 21,841 $ 395 $ 20,420 $ 7,159 $ 3,088
======== ========== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
<TABLE>
<CAPTION>
HIGHTEC, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common Stock
Common Stock Subscribed
------------------- ---------------- Paid in Retained
Shares Amount Shares Amount Capital Deficit Total
--------- ------ ------ ------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1993 7,592,050 $7,592 -- $ -- $1,534,951 $(1,543,071) $ (528)
Net income -- -- -- -- -- 982 982
--------- ------ ------- ----- ---------- ----------- --------
Balance, June 30, 1994 7,592,050 7,592 -- -- 1,534,951 (1,542,089) 454
Common stock subscribed,
net of $5,500 in subscriptions
receivable -- -- 400,000 -- -- -- --
Net income -- -- -- -- -- 3,088 3,088
--------- ------ ------- ----- ---------- ----------- --------
Balance, June 30, 1995 7,592,050 $7,592 400,000 -- $1,534,951 $(1,539,001) $ 3,542
--------- ------ ------- ----- ---------- ----------- --------
Net income for period -- -- -- -- -- 20,420 20,420
--------- ------ ------- ----- ---------- ----------- --------
Balance, March 31, 1996 7,592,050 $7,592 400,000 $ -- $1,534,951 $(1,518,581) $ 23,962
========= ====== ======= ===== ========== =========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
<TABLE>
<CAPTION>
HIGHTEC, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months
Ending June 30, For the year
------------------------- Ending June 30,
1996 1995 1995
-------- -------- -----------
(Unaudited) (Audited)
<S> <C> <C> <C>
REVENUES:
Net income $ 20,420 $ 7,159 $ 3,088
Increase (decrease) in:
Taxes payable 800 800 --
-------- -------- -------
NET CASH PROVIDED (ABSORBED)
BY OPERATING ACTIVITIES 21,220 7,859 3,088
NET INCREASE (DECREASE) IN CASH 21,220 7,859 3,088
CASH, AT BEGINNING OF PERIOD 3,542 454 454
-------- -------- -------
CASH, AT END OF PERIOD $ 24,762 $ 8,413 $ 3,542
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
HIGHTEC, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPANY
Hightec, Inc. (formerly Hightec Fund, Inc.) was incorporated under the
laws of the state of Delaware on October 22, 1968. For the period from
April 1973 to August 1994 the Company had no activity and its charter
was voided by the state of Delaware. In August 1994 the Company's
charter was revived.
On April 9, 1995 the Board of Directors approved a name change from
Hightec Fund, Inc. to Hightec, Inc.
CONSOLIDATION
The financial statements include the accounts of Hightec, Inc. and its
wholly owned subsidiary Navmatic Corporation, Inc.
ACQUISITION
During May 1995 pursuant to an agreement between the Company and
Navmatic Corporation, Inc., a Nevada Corporation, the Company acquired
100% of the outstanding stock of Navmatic Corporation, Inc. in exchange
for 7,192,845 shares of the Company's common stock. This acquisition
has been accounted for as a pooling of interest.
FINANCIAL STATEMENT PRESENTATION
The consolidated financial statements include the activity of Hightec,
Inc. and its wholly owned subsidiary Navmatic Corporation, Inc. for all
periods presented.
BUSINESS ACTIVITY
The Company, since its acquisition of Navmatic Corporation, Inc. is in
the business of manufacturing and selling the Navagator 360 Computer
Numerical Control system to be retrofitted to hydraulically indexed
machine tools.
REVENUE AND COST RECOGNITION
The Company recognizes sales revenues in full at the time of shipment.
Cost of sales and general and administrative costs are charged to
expense as incurred.
<PAGE> 8
HIGHTEC, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Major renewal and
improvements are capitalized, while maintenance and repairs are
expensed when incurred. Depreciation is computed over the estimated
useful lives of depreciable assets using the straight-line method. The
cost and accumulated depreciation for fixed assets sold, retired, or
otherwise disposed of are relieved from the accounts and resulting
gains or losses are reflected in income. Depreciation is computed over
the following estimated useful lives:
<TABLE>
<CAPTION>
<S> <C>
Furniture 5-7 Years
Equipment 5-7 Years
</TABLE>
2. PROPERTY AND EQUIPMENT
Property and equipment consists of:
<TABLE>
<CAPTION>
For the nine For the year
months ended ended
March 31, June 30,
1996 1995
----------- ---------
(Unaudited)
<S> <C> <C>
Furniture $ 8,681 $ 8,681
Equipment 13,163 13,163
-------- --------
Total 21,844 21,844
Less accumulated depreciation 21,844 21,844
-------- --------
$ - $ -
======== ========
</TABLE>
3. SUBSCRIPTION RECEIVABLE
During March, 1995 the Company issued 400,000 shares of its common
stock to Malcolm Campbell, President of the Company, in exchange for a
subscription receivable in the amount of $5,500. The subscription
receivable bears interest at 8% and both principal and interest are due
and payable March 31, 1997.
<PAGE> 9
HIGHTEC, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. INCOME TAXES
The provision for income taxes consists solely of the $800 minimum
California franchise tax.
Provisions for income taxes is summarized as follows:
<TABLE>
<CAPTION>
For the Nine Months
Ending March 31, For the Year
------------------------- Ending June 30,
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Current income taxes $800 $800 $800
Deferred income taxes - - -
---- ---- ----
Provision for income taxes $800 $800 $800
==== ==== ====
</TABLE>
The Company's total deferred tax asset as of June 30, 1995 as follows:
<TABLE>
<CAPTION>
1995
-----
<S> <C>
Deferred tax assets $ 520
Valuation allowance (520)
-----
Net deferred tax asset $ -
======
</TABLE>
The Company has a net operating loss carryforward as of June 30, 1995
of approximately $ 1,303 which is available to offset future taxable
income. The carryforwards expire as follows:
<TABLE>
<CAPTION>
Amount Expiration Date
------- ---------------
<S> <C> <C>
$1,303 2007
</TABLE>
In addition to the operating loss carryforward and the Company also has
a capital loss carryforward of approximately $52,750 which can be used
to offset future capital gains.
5. CAPITAL STOCK
In April 1995 the Company amended its Articles of Incorporation and
increased the total number of shares of common stock authorized to
50,000,000 and changed the par value to $0.001.
<PAGE> 10
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
INTRODUCTION
Hightec, Inc. ceased operations in 1973 and, accordingly, had no
revenues from operations until its merger with Navmatic Corporation and
has had limited working capital reserves. The following discussion
should be read while keeping in mind that on May 1, 1995, Hightec, Inc.
recommenced operations with the reverse acquisition of Navmatic
Corporation, a company which produces and sells numerical control
systems for use with hydraulic machinery. Since the company has
accounted for the acquisition as a recapitalization, the consolidated
financial statements include the activity of Navmatic, which is a
wholly owned subsidiary of Hightec, Inc. for all periods. Also, one
should keep in mind that there was a corresponding change in control on
May 1, 1995.
LIQUIDITY OF CAPITAL RESOURCES
Since inception, the Company has principally relied upon cash flow
generated from its operations.
The Company presently has sufficient assets and cash for its present
level of operations for the foreseeable future.
RESULTS OF OPERATIONS
The Company showed a profit of $20,420 for the first nine months of the
fiscal year ended March 31, 1996 as compared to a profit of $7,159 for
the same period in 1995. The Company expects to remain profitable for
the year since the Company is quoting on several bids.
THREE MONTHS ENDED
<TABLE>
<CAPTION>
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C> <C> <C>
Sales $25,784 100% $ 470 100%
Cost of Goods Sold 3,870 15% - -%
------- ----- ------ ----
GROSS PROFIT 21,914 85% 470 100%
Operating Expenses 73 -% 75 16%
------- ----- ------ ----
INCOME FROM OPERATIONS 21,841 85% 395 84%
</TABLE>
In the third quarter the Company has increased sales over the same
quarter in 1995 of $25,314 (5,486%) and an increase in income from
operations of $21,446 (5,429%).
<PAGE> 11
<TABLE>
<CAPTION>
HIGHTEC, INC.
FORM 10-QSB
QUARTER ENDED MARCH 31, 1996
<S> <C>
PART II OTHER INFORMATION
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:
a) No exhibits are filed as part of this report
b) Reports on Form 8-K - None
</TABLE>
<PAGE> 12
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.
HIGHTEC, INC
Date: July 16, 1996 /s/ Malcolm D. Campbell
----------------------- ----------------------------------
Malcolm D. Campbell
President and CFO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 24,762
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 21,844
<DEPRECIATION> (21,844)
<TOTAL-ASSETS> 24,762
<CURRENT-LIABILITIES> 800
<BONDS> 0
0
0
<COMMON> 7,592
<OTHER-SE> 16,370
<TOTAL-LIABILITY-AND-EQUITY> 24,762
<SALES> 36,428
<TOTAL-REVENUES> 0
<CGS> 13,128
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,080
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21,220
<INCOME-TAX> 800
<INCOME-CONTINUING> 20,420
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,420
<EPS-PRIMARY> .003
<EPS-DILUTED> 0
</TABLE>
