UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 333-29903
AMMONIA HOLD, INC.
(Exact name of small business issuer as specified in its charter)
Utah 75-2337459
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Gunnebo Drive, Lonoke, Arkansas 72086
(Address of principal executive offices)
Registrant's telephone no., including area code: (501) 676-2994
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding as of September 30, 2000
Common Stock, $.001 par value 7,697,190
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . 3
Balance Sheets -- September 30, 2000
and June 30, 2000. . . . . . . . . . . . . . . . . . . 4
Statements of Operations -- three months ended
September 30, 2000 and 1999. . . . . . . . . . . . . . 6
Statements of Cash Flows -- three months ended
September 30, 2000 and 1999. . . . . . . . . . . . . . 7
Notes to Financial Statements . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis and
Results of Operations. . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes In Securities and Use of Proceeds. . . . . . . . 11
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of
Securities Holders . . . . . . . . . . . . . . . . . . 11
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 12
PART I
Item 1. Financial Statements
The following unaudited Financial Statements for the period
ended September 30, 2000, have been prepared by the Company.
AMMONIA HOLD, INC.
FINANCIAL STATEMENTS
September 30, 2000 and June 30, 2000
Ammonia Hold, Inc. and Subsidiary
Balance Sheets
Assets
September 30, June 30,
2000 2000
(unaudited) (audited)
Current assets
Cash and Cash equivalents $ 25,910 $ 18,042
Accounts receivable net of
allowance for doubtful accounts
$25,275 964,473 967,766
Prepaid expenses 28,614 28,604
Investments in Trading equities 483,400 483,400
Inventory 850,688 876,614
Other receivables and accrued investment income 27,260 27,260
Notes receivable-current 165,339 167,840
Total Current Assets $ 2,545,684 $ 2,569,526
PROPERTY, PLANT & EQUIPMENT
Depreciable assets - net of accumulated
depreciation 1,526,377 1,559,845
Land 281,212 281,212
Total Property, Plant and Equipment 1,807,589 1,841,057
OTHER ASSETS
Deposits - -
Patents - net of accumulated
amortization of $309,987 and
$270,887, respectively 353,298 363,050
Investments 677,100 677,100
Total Other Assets 1,030,398 1,040,150
Total Assets $ 5,383,671 $ 5,450,733
(continued)
Ammonia Hold, Inc. and Subsidiary
Balance Sheets
(continued)
Liabilities and Stockholders' Equity
September 30, June 30,
2000 2000
(unaudited) (audited)
CURRENT LIABILITIES
Accounts payable $ 339,552 $ 168,857
Accrued expenses 113,120 51,792
Margin account and overdraft - 21,576
Notes payable 425,000 415,000
Accrued allowance for coupons/
grocery store allowances 730,489 785,622
Total Current Liabilities 1,608,161 1,442,847
STOCKHOLDERS' EQUITY
Common Stock, par value $.001
authorized shares 100,000,000:
7,638,190 shares issued and outstanding 7,638 7,638
Additional Paid-in Capital 9,648,591 9,648,591
Accumulated Deficit (5,880,719) (5,648,343)
Total Stockholders' Equity (Deficit) 3,775,510 4,007,886
Total Liabilities and Stockholders' Equity $ 5,383,671 $ 5,450,733
Ammonia Hold, Inc. and Subsidiary
Statements of Operations and Other Comprehensive Income
For the Three Months
Ended September 30,
2000 1999
TOTAL REVENUES $ 479,771 $ 989,178
COST OF SALES 297,458 499,468
GROSS PROFIT 182,313 489,710
GENERAL & ADMINISTRATIVE EXPENSES 289,187 253,039
SELLING, MARKETING & ADVERTISING 85,453 330,389
DEPRECIATION 33,468 32,874
AMORTIZATION 9,752 9,752
INCOME (LOSS) FROM OPERATIONS (235,547) 136,344
OTHER INCOME 3,171 96,125
OTHER COMPREHENSIVE INCOME - 75,000
INCOME (LOSS) BEFORE INCOME TAXES (232,376) 34,781
PROVISIONS FOR INCOME TAXES - -
NET INCOME (232,376) 34,781
NET (LOSS) PER SHARE $ (.03) $ .005
WEIGHTED AVERAGE OUTSTANDING SHARES 7,638,190 7,638,190
Ammonia Hold, Inc. and Subsidiary
Statement of Cash Flows
For the Three Months
ended September 30,
2000 1999
(Unaudited) (Unaudited)
Cash Flows form Operating
Activities:
Net gain (loss) $ (232,376) $ 34,781
Non-cash items:
Depreciation 33,468 32,874
Amortization 9,752 9,753
Comprehensive income - (75,000)
Changes in current assets and liabilities:
(Increase) decrease in:
Accounts receivable 3,293 (322,577)
Prepaid expenses/deposits/notes 2,491 (22,692)
Inventories 25,926 (50,730)
Increase (decrease) in:
Accounts payable 170,695 193,491
Accrued liabilities/allowances/overdraft (15,381) (108,696)
Net Cash Provided (Used) by Operating Activities (2,132) (308,796)
Cash Flows from Investing Activities
Sale of stock - 320,186
Net Cash Provided (Used) by Investing Activities - 320,186
Cash Flows from Financing Activities:
Increase notes payable 10,000 -
Net Cash Provided by Financing Activities 10,000 -
Net increase (decrease) in cash 7,868 11,390
Cash and Cash Equivalents at Beginning of Period 18,042 11,181
Cash and Cash Equivalents at End of Period $ 25,910 $ 22,571
Supplemental Cash Flow Information:
Cash paid for interest $ - $ -
Cash paid for income taxes $ - $ -
Ammonia Hold, Inc. and Subsidiary
September 30, 2000
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
Ammonia Hold, Inc. and Subsidiary (the Company) has elected to omit
substantially all footnotes to the financial statements for the
three months ended September 30, 2000 since there have been no
material changes (other than indicated in other footnotes) to the
information previously reported by the Company in their Annual
Report filed of Form 10-KSB for the Fiscal year ended June 30, 2000.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and
records of the Company without audit. However, such information
reflects all adjustment which are, in the opinion of management,
necessary to properly reflect the results of the interim period
presented. The information presented is not necessarily indicative
of the results from operations expected for the full fiscal year.
Item 2. Management's Discussion and Analysis or Plan
of Operations
The following table sets forth the percentage relationship to
sales of principal items contained in the Company's Statements of
Operations for the three month periods ended September 30, 2000 and
1999. It should be noted that percentages discussed throughout this
analysis are stated on an approximate basis.
Three Months Ended
September 30,
2000 1999
(Unaudited)
Total revenues . . . . . . . . . . . . . . . 100% 100%
Cost of sales. . . . . . . . . . . . . . . 62% 50%
Gross profit . . . . . . . . . . . . . . . . 38% 50%
General and administrative expenses. . . . . 60% 26%
Selling and marketing expense. . . . . . . . 18% 33%
Depreciation and amortization. . . . . . . . 9% 4%
Other income . . . . . . . . . . . . . . . . 1% 10%
Income (loss) before income taxes. . . . . . (48%) 3%
Provisions income taxes. . . . . . . . . . . - -
Net income . . . . . . . . . . . . . . . . . (48%) 3%
Results of Operations
Total revenues for the three month period ended September 30,
2000 ("first quarter" of fiscal 2000) decreased 51% compared to the
same 1999 fiscal period, due to reduced orders for product. Cost
of sales (as a percentage of total revenues) increased to 62% for
the first quarter from 50% for the first quarter of 1999, due to
sale of lower margin products. Actual cost of sales decreased 40%
in the first quarter primarily due to lower sales, which resulted
in a 63% decrease in gross profit for the quarter. General and
administrative expenses increased 14% for the first quarter of 2000
due to increased facility size and increased staff, and sales and
marketing expenses decreased 74% for the quarter due to lower sales.
For the first quarter of fiscal 2000, the Company had other
income of $3,171 compared to $96,125 for the 1999 period, primarily
due to greater sales of investment securities in the 1999 period.
The Company also recorded other comprehensive income of $75,000 for
the first quarter of fiscal 1999, reflecting unrealized appreciation
in the Company's equity investments for that period.
The Company had a net loss of $232,376 for the first quarter
of 2000 compared to a net profit of $34,781 for the first quarter
of 1999. This reflects the 51% decrease in revenues in the 2000
period.
Liquidity and Capital Resources
For the past two fiscal years, the Company's working capital
needs have been satisfied primarily through its operations and by
cash provided from its investing activities. Working capital at
September 30, 2000 was $937,523, a 17% decrease from $1,126,679 at
June 30, 2000. The decrease in working capital is primarily
attributed to the 101% increase in accounts payable and the 118%
increase in accrued expenses due to the loss of revenues from
decreased distribution to grocery chains.
Net cash used by operating activities for the first quarter of
2000 was $2,132 compared to $308,796 for the corresponding 1999
period. This decrease in cash used is primarily attributed to the
loss of distribution of the Company's products in grocery chains.
The Company also realized $320,186 in cash flows from investing
activities during the first quarter of 1999 compared to $0 for the
first quarter of 2000. This was due to the sale of investment
securities in the 1999 period.
The Company anticipates meeting its working capital needs
during the next twelve months primarily with revenues from
operations resulting from increased marketing activities related to
the Company's products. If the Company's operations are not
adequate to fund its operations and it is unable to secure financing
from private sources or from the sale of its securities, the Company
could experience a cash flow shortage which could curtail the
Company's operations.
As of September 30, 2000, the Company had total assets of
$5,383,671 and total stockholders' equity of $3,775,510. In
comparison, as of June 30, 2000, the Company had total assets of
$5,450,733 and total stockholders' equity of $4,007,886.
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company wishes to advise readers that
actual results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including, but
not limited to, the following: the ability of the Company to
generate working capital, the development of the Company's existing
and new products, the potential market for the Company's products,
competitive factors, and other risks detailed in the Company's
periodic report filings with the Securities and Exchange Commission.
PART II
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the
Company or any of its subsidiaries is a party or to which any of its
property is subject and, to the best of its knowledge, no such
actions against the Company are contemplated or threatened.
Item 2. Changes In Securities and Use of Proceeds
This Item is not applicable to the Company.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company.
Item 5. Other Information
This Item is not applicable to the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three month period ended September 30, 2000.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMMONIA HOLD, INC.
Date: November 21, 2000 By: /S/ Michael D. Parnell
MICHAEL D. PARNELL,
President and Director
Date: November 21, 2000 By: /S/ Dan N. Thompson
DAN N. THOMPSON,
Secretary, Treasurer, Chief
Financial Officer and
Director
(Principal Accounting Officer)
