<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
/X/ Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended September 30, 1996
------------------
Commission file number 0-27344
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Hightec, Inc.
- -------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 52-0894692
- ------------------------------------------------------- -----------------------
(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)
(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 November 1, 1996, Hightec, Inc. had 7,992,050 shares of common stock
outstanding.
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ITEM 1
FINANCIAL STATEMENTS
<PAGE> 3
HIGHTEC, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 4,590 $ 897
Accounts receivable -- 24,945
Interest receivable 623 513
Inventory 3,100 3,100
------------ ----------
TOTAL CURRENT ASSETS 8,313 29,455
PROPERTY AND EQUIPMENT,
less $21,844, of accumulated depreciation (Note B) -- --
------------ ----------
$ 8,313 $ 29,455
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -- $ 11,106
Income tax payable 1,341 2,295
------------ ----------
TOTAL LIABILITIES 1,341 13,401
STOCKHOLDERS' EQUITY
Common stock, $.001 par value,
50,000,000 shares authorized,
7,992,050 shares issued and
outstanding 7,992 7,992
Paid in capital 1,540,051 1,540,051
Less stock subscription receivable (Note C) (5,500) (5,500)
Retained deficit (1,535,571) (1,526,489)
------------ ----------
TOTAL STOCKHOLDERS' EQUITY 6,972 16,054
------------ ----------
$ 8,313 $ 29,455
============ ==========
</TABLE>
<PAGE> 4
HIGHTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the three months ended
September 30, For the year ended June 30,
-------------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Sales $ 1,108 $ 6,943 $ 61,373 $ 31,562
COST OF GOODS SOLD -- 4,223 44,271 26,505
----------- ----------- ----------- -----------
GROSS PROFIT 1,108 2,720 17,102 5,057
OPERATING EXPENSES 10,300 1,184 2,320 1,169
----------- ----------- ----------- -----------
INCOME (LOSS) FROM
OPERATIONS (9,192) 1,536 14,782 3,888
OTHER INCOME (EXPENSES)
Interest income 110 -- 513 --
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES (9,082) 1,536 15,295 3,888
Income Taxes (Note D) -- -- 2,295 488
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (9,082) $ 1,536 $ 13,000 $ 3,400
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE $ (.001) $ 0.0002 $ 0.002 $ 0.0004
=========== =========== =========== ===========
AVERAGE COMMON SHARES
OUTSTANDING 7,992,050 7,592,050 7,992,050 7,326,046
=========== =========== =========== ===========
</TABLE>
<PAGE> 5
HIGHTEC, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Common Stock
Common Stock Subscribed
----------------------- ------------------- Paid in Retained
Shares Amount Shares Amount Capital Deficit Total
------ ----- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JUNE 30, 1994 7,592,050 $ 7,592 -- $ -- $ 1,534,951 $(1,542,889) $ (346)
Issues 400,000 shares of
Common stock net of
$5,500 in subscriptions
receivable -- -- 400,000 400 5,100 -- 5,500
Net income for year -- -- -- -- -- 3,400 3,400
--------- -------- ------- -------- ----------- ----------- -------
Less subscription receivable -- -- -- -- -- -- (5,500)
--------- -------- ------- -------- ----------- ----------- -------
BALANCE, JUNE 30, 1995 7,592,050 7,592 400,000 400 1,540,051 (1,539,489) 3,054
Net income for year -- -- -- -- -- 13,000 13,000
Less subscription receivable -- -- -- -- -- -- (5,500)
--------- -------- ------- -------- ----------- ----------- -------
BALANCE, JUNE 30, 1996 7,592,050 $ 7,592 400,000 $ 400 $1,540,051 $(1,526,489) $16,054
========= ======== ======= ======== ========== =========== =======
Net loss (unaudited) -- -- -- -- -- (9,082) (9,082)
--------- -------- ------- -------- ----------- ----------- -------
BALANCE, JUNE 30, 1996 7,592,050 $ 7,592 400,000 $ 400 $1,540,051 $(1,535,571) $ 6,972
========= ======== ======= ======== ========== =========== =======
</TABLE>
<PAGE> 6
HIGHTEC, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the months ended
September 30, For the year ended June 30,
-------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) $ (9,082) $ 1,536 $ 13,000 $ 3,400
Adjustments to reconcile net
income to net cash provided by
operating activities:
Change in accounts receivable 24,945 -- (24,945) --
Change in interest receivable (110) -- (513) --
Change in accounts payable (11,106) -- 11,106 --
Change in income tax payable (954) -- 1,807 (312)
Change in inventory -- -- (3,100) --
----------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 3,693 1,536 (2,645) 3,088
----------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH 3,693 1,536 (2,645) 3,088
CASH, BEGINNING OF PERIOD 897 3,542 3,542 454
----------- --------- --------- ---------
CASH, END OF PERIOD $ 4,590 $ 5,078 $ 897 $ 3,542
========== ======== ========= =========
</TABLE>
<PAGE> 7
HIGHTEC, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The financial statements include the accounts of Hightec, Inc. and its
wholly owned subsidiary Navmatic Corporation (together, the "Company").
All intercompany transactions have been eliminated in consolidation.
COMPANY
Hightec Fund, Inc. was incorporated under the laws of the state of
Delaware in October, 1968. During March, 1995 the Board of Directors
changed the name from Hightec Fund, Inc. to Hightec, Inc.
Hightec, Inc. was inactive until May 21, 1995 on which date it acquired
Navmatic Corporation ("Navmatic") in a reverse acquisition. The
historical financial statements of the Company presented include the
financial condition and results of operations of Navmatic for all
reported periods.
ACQUISITION
During May 1995, pursuant to an agreement between Hightec, Inc. and
Navmatic Corporation, Hightec, Inc. acquired Navmatic in a reverse
acquisition. Hightec, Inc. issued 7,192,845 shares of common stock for
all of the outstanding shares of Navmatic. Because Hightec, Inc. was
inactive prior to the acquisition, this acquisition has been accounted
for as a recapitalization of the Company's stockholders' equity rather
than as a business combination.
BUSINESS ACTIVITY
The Company, through its wholly owned subsidiary is in the business of
manufacturing and selling the Navagator 360 Computer Numerical Control
system to be retrofitted to hydraulically indexed machine tools.
BASIS OF ACCOUNTING
The Company's policy is to use the accrual method of accounting and to
prepare and present financial statements which conform to generally
accepted accounting principles. The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.
<PAGE> 8
HIGHTEC, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Continued)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
INVENTORY
Inventory consists of raw materials and is stated at lower of cost
(using the first-in, first-out method) or market.
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:
Furniture 5-7 Years
Equipment 5-7 Years
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of
various assets for financial and income tax reporting. The deferred tax
assets and liabilities represent the future tax return consequences of
those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Deferred taxes also
are recognized for operating losses that are available to offset future
taxable income and tax credits that are available to offset federal
income taxes.
<PAGE> 9
HIGHTEC, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(CONTINUED)
B. PROPERTY AND EQUIPMENT
Property and Equipment consists of:
<TABLE>
<CAPTION>
September 30, June 30,
1996 1995
------------- ---------
<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
-------- --------
Net Property and
Equipment $ -- $ --
======== =========
</TABLE>
C. SUBSCRIPTION RECEIVABLE
During March, 1995 the Company issued 400,000 shares of its common
stock to Malcom 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. Accordingly, the subscribed stock is
reflected in the accompanying financial statements as a separate
component of stockholder's equity, net of any subscriptions receivable.
D. INCOME TAXES
The provision for income taxes for the three months ended September 30,
1996 and year ended June 30, 1996 is summarized as follows:
<TABLE>
<CAPTION>
Three months Year ended
ended September 30, June 30,
1996 1996
------------------- ----------
<S> <C> <C>
Current income taxes - federal $ -- $ 2,295
Deferred income taxes -- --
----------- --------
Provision for income taxes $ -- $ 2,295
=========== =======
</TABLE>
The Company has a capital loss carryforward of approximately $ 52,750
which can be used to offset future capital gains.
<PAGE> 10
HIGHTEC, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(CONTINUED)
F. CAPITAL STOCK
In April 1995 the Company amended its Articles of Incorporation and
increased its total number of shares of common stock authorized to
50,000,000 and changed the par value per share to $0.001.
G. LEASE COMMITMENTS
The Company has no lease commitments for offices as of June 30, 1996.
The Company rents its offices under a month to month rental agreement.
H. SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental disclosures of cash flows for the three months ended
September 30, 1996 and year ended June 30, 1996 are summarized as
follows:
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------- --------
<S> <C> <C>
Cash paid for income taxes $ 954 $ 488
===== =====
</TABLE>
<PAGE> 11
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
INTRODUCTION
Hightec, Inc. ceased operations in 1973 and, according, had no
revenues from operations until it's 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 loss of $9,192 for the first three months
of the fiscal year ended September 30, 1996 as compared to a
profit of $1,536 for the same period in 1995. The Company
expects to show a profit before the close of the year since
the Company has quoted several major systems.
THREE MONTHS ENDED
<TABLE>
<CAPTION>
Sept 30, 1996 Sept 30, 1995
------------- --------------
<S> <C> <C> <C> <C>
Sales $ 1,108 100% $ 6,943 100%
Cost of Goods Sold -- --% 4,223 61%
------- --- ------- ---
GROSS PROFIT 1,108 100% 2,720 39%
Operating Expenses 10,300 930% 1,184 17%
------- --- ------- ---
INCOME FROM OPERATIONS (9,192) (830%) 1,536 84%
</TABLE>
In the first quarter the Company has decreased sales over the
same quarter in 1995 of $5,835 (84%) and a decrease in income
from operations of $10,728 (698%).
<PAGE> 12
HIGHTEC, INC.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 1996
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
<PAGE> 13
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: November 12, 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> SEP-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,590
<SECURITIES> 0
<RECEIVABLES> 623
<ALLOWANCES> 0
<INVENTORY> 3,100
<CURRENT-ASSETS> 8,313
<PP&E> 21,844
<DEPRECIATION> (21,844)
<TOTAL-ASSETS> 8,313
<CURRENT-LIABILITIES> 1,341
<BONDS> 0
0
0
<COMMON> 7,992
<OTHER-SE> (1,020)
<TOTAL-LIABILITY-AND-EQUITY> 6,972
<SALES> 1,108
<TOTAL-REVENUES> 1,218
<CGS> 0
<TOTAL-COSTS> 10,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,082)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,082)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,082)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> (.001)
</TABLE>
