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 March 31, 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 March 31, 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 -- March 31, 2000
and June 30, 1999. . . . . . . . . . . . . . . . . . . 4
Statements of Operations -- three and nine
months ended March 31, 2000 and 1998 . . . . . . . . . 6
Statements of Cash Flows -- three and nine
months ended March 31, 2000 and 1998 . . . . . . . . . 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. . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 13
PART I
Item 1. Financial Statements
The following unaudited Financial Statements for the period
ended March 31, 2000, have been prepared by the Company.
AMMONIA HOLD, INC.
FINANCIAL STATEMENTS
March 31, 2000 and June 30, 1999
Ammonia Hold, Inc. and Subsidiaries
Consolidated Balance Sheets
Assets
March 31, June 30,
2000 1999
(unaudited) (audited)
CURRENT ASSETS
Cash and Cash equivalents $ 5,384 $ 11,181
Accounts receivable net of
allowance for doubtful accounts
of $25,275 and $14,186, respectively 1,056,915 766,746
Prepaid expenses 29,081 28,790
Investments in Trading equities 1,017,800 1,218,740
Inventory 794,673 858,663
Other receivables and accrued interest 22,516 26,390
Notes receivable - current 245,288 361,410
Total Current Assets $ 3,171,657 $ 3,271,920
PROPERTY, PLANT & EQUIPMENT
Depreciable assets - net of accumulated
depreciation 1,619,453 1,689,071
Land 281,212 281,212
Total Property, Plant and Equipment 1,900,665 1,970,283
OTHER ASSETS
Deposits 55,000 50,000
Patents - net of accumulated
amortization of $290,393 and
$261,134, respectively 372,802 402,061
Investments/other assets 840,972 747,100
Total Other Assets 1,268,774 1,199,161
Total Assets $ 6,341,096 $ 6,441,364
(continued)
Ammonia Hold, Inc. and Subsidiaries
Consolidated Balance Sheets
(continued)
Liabilities and Stockholders' Equity
March 31, June 30,
2000 1999
(unaudited) (audited)
CURRENT LIABILITIES
Accounts payable $ 305,636 $ 238,264
Notes payable- related party 115,113 -
Accrued expenses 59,811 27,050
Margin account and overdraft - 99,114
Total Current Liabilities 480,560 364,428
STOCKHOLDERS' EQUITY
Series A convertible preferred stock,
$.001 par value; 25,000,000 shares
authorized; 3,000 shares issued and
outstanding at June 30, 1997 - -
Common Stock, par value $.001
authorized shares 100,000,000:7,638,190 &
7,638,190 shares issued and outstanding,
respectively 7,638 7,638
Addition paid in capital 9,648,591 9,648,591
Accumulated Deficit (3,795,693) (3,579,293)
Total Stockholders' Equity (Deficit) 5,860,536 6,076,936
Total Liabilities and Stockholders' Equity $ 6,341,096 $ 6,441,364
Ammonia Hold, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months For the Nine Months
Ended March 31, Ended March 31,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total Revenues $ 322,875 $ 693,698 $ 2,129,104 $ 1,750,222
Cost of Sales 185,066 381,534 1,185,478 1,033,481
Gross Profit 137,809 312,164 943,626 716,741
General &
Administrative Expenses 393,970 122,504 1,200,632 679,291
Sales & Marketing 112,116 288,262 782,855 397,588
Total Expense 506,086 410,766 1,983,487 1,076,879
Income/(Loss) from operation(368,277) (98,602) (1,039,861) (360,138)
Other Income 49,812 68,682 87,261 389,454
Other Comprehensive Income - 158,000 736,200 158,000
Income (Loss)
Before Income Taxes (318,465) 128,080 (216,400) 187,316
Provisions For Income Taxes - - - -
Net Income (318,465) 128,080 (216,400) 187,316
Net (Loss) Per Share $ (.04) $ .016 $ (.027) $ .024
Weighted Average
Outstanding Shares 7,638,190 7,967,190 7,638,190 7,967,190
Ammonia Hold, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
For the Nine Months
Ended March 31,
2000 1999
Cash Flows form Operating Activities:
Net gain (loss) $ (216,400) $ 187,316
Non-cash items:
Depreciation 95,138 49,264
Amortization 29,260 29,259
Comprehensive Income (679,105)
Changes in current assets and liabilities:
(Increase) decrease in:
Accounts receivable (290,169) (273,415)
Prepaid expenses/deposits (5,291) (24,418)
Inventories 63,990 (151,316)
Other receivables 3,874 (85,321)
Increase (decrease) in:
Accounts payable 67,372 (66,218)
Accrued liabilities (66,353) 4,953
Net Cash Provided (Used) by
Operating Activities (997,684) (329,896)
Cash Flows from Investing Activities
Purchase land - (5,000)
Purchase/sale of equity and bonds 798,172 486,293
Purchase of property and equipment (37,520) (432,185)
Purchase Treasury stock - (412,740)
Note Receivable 116,122 -
Note Payable 115,113 -
Net Cash Provided (Used)
Investing Activities 991,887 (363,632)
Cash Flows from Financing Activities:
Issuance of Preferred Stock - -
Issuance of common stock - -
Net Cash Provided by
Financing Activities - -
Net increase (decrease) in cash (5,797) (693,528)
Cash and Cash Equivalents at
Beginning of Period 11,181 854,883
Cash and Cash Equivalents at
End of Period $ 5,384 $ 161,355
Supplemental Cash Flow Information:
Cash paid for interest $ - $ -
Cash paid for income taxes $ - $ -
Ammonia Hold, Inc. and Subsidiaries
March 31, 2000
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
Ammonia Hold, Inc. and Subsidiaries (the Company) has elected to
omit substantially all footnotes to the financial statements for the
nine months ended March 31, 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, 1999.
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 and nine month periods ended March
31, 2000 and 1999. It should be noted that percentages discussed
throughout this analysis are stated on an approximate basis.
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
(Unaudited) (Unaudited)
Total revenues . . . . . . . . . . . . . . 100% 100% 100% 100%
Cost of sales. . . . . . . . . . . . . . . 57 55 56 59
Gross profit . . . . . . . . . . . . . . . 43 45 44 41
Total expenses . . . . . . . . . . . . . . 157 59 93 62
Income (loss) from operations. . . . . . . (114) (14) (49) (21)
Other income . . . . . . . . . . . . . . . 15 10 4 22
Other comprehensive income . . . . . . . . - 23 35 9
Income before income taxes . . . . . . . . (99) 19 (10) 10
Provisions income taxes. . . . . . . . . . - - - -
Net income . . . . . . . . . . . . . . . . (99) 19 (10) 10
Results of Operations
Total revenues for the three month period ended March 31, 2000
("third quarter" of fiscal 2000) decreased 53% compared to the same
1999 fiscal period, due to reduced orders for product. Cost of
sales (as a percentage of total revenues) increased to 57% for the
third quarter from 55% for the second quarter of 1999, due to sale
of lower margin products. Actual cost of sales decreased 51% in the
third quarter primarily due to lower sales, which resulted in a 56%
decrease in gross profit for the quarter. General and
administrative expenses increased 222% for the third quarter of 2000
due to increased facility size and increased staff, and sales and
marketing expenses decreased 61% for the quarter due to lower sales.
Revenues for the nine month period ended March 31, 2000 ("first
nine months of fiscal 2000") increases 22% due primarily to
increased sales and marketing activity and new customer orders.
Cost of sales (as a percentage of total revenues) decreased to 56%
for the first nine months from 59% for the comparable 1999 period
due to shipment of higher margin products. Actual cost of sales
increased 15% in the third quarter primarily due to lower sales,
which resulted in a 32% increase in gross profit for the quarter.
General and administrative expenses increased 77% for the first nine
months of 2000 due to salaries and other costs associated with new
product distribution, and sales and marketing expenses increased 97%
for the period due to increased promotional costs.
For the third quarter of fiscal 2000, the Company had other
income of $49,812 compared to $68,682 for the 1999 period, primarily
due to greater sales of investment securities in the 1999 period.
For the first nine months of fiscal 2000, the Company had other
income of $87,261 compared to $389,454 for the 1999 period, also due
to greater sales in 1999. The Company also recorded other
comprehensive income of $-0- and $736,200 for the third quarter and
first nine months of fiscal 2000, respectively, compared to $158,000
and $158,000 for the comparable 1999 periods. This reflected
unrealized appreciation in the Company's equity investments for the
respective periods.
The Company had a net loss of $318,465 for the third quarter
of 2000 and a net loss of $216,400 for the first nine months of
2000. Comparatively, the Company had net profits of $128,080 and
$187,316 for the 1999 periods. These results are attributed to
increased promotional and marketing costs.
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
December 30, 1999 was $2,691,097, a 7% decrease from $2,907,492 at
June 30, 1999. The decrease in working capital is primarily
attributed to the 16% decline in investments in trading equities
reflecting less trading activity, and the 32% decrease in notes
receivable due to the redemption of notes. Also, the Company had
a 28% increase in accounts payable due to increased orders. The
decrease in working capital was partially offset by the 38% increase
in accounts receivable due to increased orders.
Net cash used by operating activities for the first nine months
of fiscal 2000 was $997,684 compared to $329,896 for the
corresponding 1999 period. This increase in cash used is primarily
attributed to the net loss for the period and increases in sales and
marketing expenses as well as increased facilities and staff.
For the first nine months of fiscal 2000, the Company realized
cash from investing activities of $991,887. This was due primarily
to $798,172 realized from the sale of marketable securities, receipt
of $116,122 from a note receivable, and receipt of $115,113 from an
officer's loan to the Company. In comparison, for the first nine
months of fiscal 1999, the Company used $363,632 in cash for
investing activities, primarily due to the purchase of property and
equipment of $432,185 and the purchase of the Company's own shares
that were returned to treasury of $412,740. These results were
partially offset by $486,293 realized from the sale of marketable
securities.
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 March 31, 2000, the Company had total assets of
$6,341,096 and total stockholders' equity of $5,860,536. In
comparison, as of June 30, 1999, the Company had total assets of
$6,441,364 and total stockholders' equity of $6,076,936.
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 March 31, 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: May 22, 2000 By /S/ Michael D. Parnell
MICHAEL D. PARNELL,
President and Director
Date: May 22, 2000 By /S/ Dan N. Thompson
DAN N. THOMPSON, Secretary,
Treasurer, Chief
Financial Officer and
Director
(Principal Accounting
Officer)
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<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE AMMONIA HOLD, INC. FINANCIAL
STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2000 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
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<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
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<CASH> 5,384
<SECURITIES> 1,017,800
<RECEIVABLES> 1,082,190
<ALLOWANCES> 25,275
<INVENTORY> 794,673
<CURRENT-ASSETS> 3,171,657
<PP&E> 1,900,665
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,341,096
<CURRENT-LIABILITIES> 480,560
<BONDS> 0
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<COMMON> 7,638
<OTHER-SE> 9,648,591
<TOTAL-LIABILITY-AND-EQUITY> 6,341,096
<SALES> 2,129,104
<TOTAL-REVENUES> 2,29,104
<CGS> 1,185,478
<TOTAL-COSTS> 1,983487
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (216,400)
<INCOME-TAX> 0
<INCOME-CONTINUING> (216,400)
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<EXTRAORDINARY> 0
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<NET-INCOME> (216,400)
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