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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q SB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD 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: 001-15777
UNITREND, INC.
(Exact name of registrant as specified in its charter)
Nevada 34-1904923
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
4665 West Bancroft St.
Toledo, Ohio 43615
(Address of principal executive offices, including zip code)
(419) 536-2090
(Registrant's telephone number, including area code)
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 [X] NO [ ]
Number of shares of registrant's common stock outstanding as of September 30,
2000: 69,383,580
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UNITREND, INC. AND SUBSIDIARY
FORM 10-Q SB
QUARTER ENDED SEPTEMBER 30, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2000 and December 31,
1999............................................................................... 3
Condensed Consolidated Statements of Operations for the three and nine months
ended September 30, 2000 and 1999.................................................. 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2000 and 1999........................................................ 5
Consolidated Statements of Stockholders' Equity (Deficit) for the years ended
December 31, 1999, 1998 and for the nine months ended September 30, 2000........... 6
Notes to Condensed Consolidated Financial Statements............................... 7-8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................... 8-11
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 Security Holders................................ 11
Item 5. Other Information.................................................................. 11
Item 6. Exhibit............................................................................ 11
Signatures......................................................................... 11
</TABLE>
This Quarterly Report on Form 10-Q SB is for the three months ended September
30, 2000. This Quarterly Report modifies and supersedes documents filed prior to
this Quarterly Report. The SEC allows us to "incorporate by reference"
information that we file with them, which means that we can disclose important
information to you by referring you directly to those documents. Information
incorporated by reference is considered to be part of this Quarterly Report. In
addition, information that we file with the SEC in the future will automatically
update and supersede information contained in this Quarterly Report. In this
Quarterly Report, "Unitrend," "we," "us" and "our" refer to Unitrend, Inc. and
its subsidiaries.
You should carefully review the information contained in this Quarterly Report
and in other reports or documents that we file from time to time with the SEC.
In this Quarterly Report, we state our beliefs of future events and of our
future financial performance. In some cases, you can identify those so-called
"forward-looking statements" by words such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue" or the negative of those words and other comparable
words. You should be aware that those statements are only our predictions.
Actual events or results may differ materially. In evaluating those statements,
you should specifically consider various factors, including the risks outlined
below. Those factors may cause our actual results to differ materially from any
of our forward-looking statements.
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Part I. Financial Information
Item I. Condensed Consolidated Financial Statements
UNITREND, INC AND SUBSIDIARY
(Development Stage Companies)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS Unaudited Audited
September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,231 $ 8,779
Current portion of notes receivable 22,458 22,458
Prepaid expenses -- 19,830
------------ -----------
Total current assets 23,689 51,067
------------ -----------
PROPERTY AND EQUIPMENT, at cost
Land 67,485 67,485
Building and improvements 376,385 376,385
Furniture and fixtures 82,395 72,295
Computer equipment 151,062 125,054
Computer software 46,719 45,328
Automobiles 15,937 15,937
Tooling and dies under construction 1,469,429 1,429,429
------------ -----------
2,209,412 2,131,913
Less accumulated depreciation (226,565) (198,879)
------------ -----------
Net property and equipment 1,982,847 1,933,034
------------ -----------
OTHER ASSETS
Patent licensing costs, net of accumulated amortization 29,390 30,790
Loan costs, net of accumulated amortization 2,997 3,813
Notes receivable 12,381 11,550
------------ -----------
Total other assets 44,768 46,153
------------ -----------
TOTAL ASSETS $ 2,051,304 $ 2,030,254
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 303,803 $ 292,143
Current portion of long-term debt 19,332 19,332
Accrued expenses 360,709 14,922
------------ -----------
Total current liabilities 683,844 326,397
------------ -----------
LONG-TERM LIABILITIES
Note payable - bank 231,964 244,892
Note payable - stockholder 157,943 1,703,854
Accrued interest 5,607 72,215
------------ -----------
Total long-term liabilities 395,514 2,020,961
------------ -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, no par value 3,301,503 3,301,503
Additional paid-in-capital 8,023,695 5,770,055
Deficit accumulated in the development stage (10,353,252) (9,388,662)
------------ -----------
Total stockholders' equity (deficit) 971,946 (317,104)
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 2,051,304 $ 2,030,254
============ ===========
</TABLE>
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UNITREND, INC AND SUBSIDIARY
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Sales $ -- $ -- $ -- $ --
Research and development
expenses -- (6,523) (16,680) (6,523)
Selling, general and
administrative expenses (254,213) (263,044) (918,775) (705,932)
------------ ------------ ------------ ------------
Operating loss (254,213) (269,567) (935,455) (712,455)
Interest income 425 -- 831 --
Interest expense (12,631) (54,946) (29,966) (69,008)
------------ ------------ ------------ ------------
Net loss $ (266,419) $ (324,513) $ (964,590) $ (781,463)
============ ============ ============ ============
Basic and diluted loss per share:
Net loss $ -- $ -- $ (0.01) $ (0.01)
============ ============ ============ ============
Weighted average shares outstanding
used to compute basic and diluted
loss per share 69,383,580 69,380,265 69,383,580 69,368,370
============ ============ ============ ============
</TABLE>
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UNITREND, INC AND SUBSIDIARY
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Unaudited Unaudited
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(964,590) $ (781,463)
--------- -----------
Adjustments to reconcile net loss to net
cash used in operating activities
Options issued for services 11,844 7,477
Depreciation & amortization 29,902 19,928
Common stock issued for services -- 10,000
Decrease in operating assets
Prepaid expenses 19,830 --
Accrued interest income (831) --
Increase (decrease) in operating liabilities:
Accounts payable 11,660 (508,144)
Accrued expenses 349,121 1,045
--------- -----------
Total adjustments 421,526 (469,694)
--------- -----------
Net cash used in operating activities (543,064) (1,251,157)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for patent licensing costs (31,723)
Purchase of property and equipment (77,499) (89,555)
Repayment from other entities -- 5,455
--------- -----------
Net cash used in investing activities (77,499) (115,823)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on notes (12,928) (12,888)
Loans from shareholder 625,943 1,107,341
Proceeds from sale of common stock -- 292,910
--------- -----------
Net cash provided by financing activities 613,015 1,387,363
--------- -----------
Net increase (decrease) in cash (7,548) 20,383
Cash - beginning of period 8,779 1,891
--------- -----------
Cash - end of period $ 1,231 $ 22,274
========= ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 26,632 $ 21,869
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
During the nine months ended September 30, 2000 the
President/majority stockholder forgave loans to the company
of $2,171,854, and accrued interest of $69,942. The
forgiveness of the loans was accounted for as an addition
to contributed capital
</TABLE>
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UNITREND, INC AND SUBSIDIARY
(Development Stage Companies)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Nine Months Ended September 30, 2000
And For the Years Ended December 31, 1999, and 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
----------------------------------- Paid-In Development
Shares Amount Capital Stage Total
-------------- --------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE -
DECEMBER 31, 1998 68,608,260 $2,906,343 $5,762,187 (8,054,078) $ 614,452
Sale of common stock for
cash at $0.50 per share
from January 1 to
June 30, 1999 770,320 385,160 -- -- 385,160
Stock options issued on
January 15, August 10,
August 15, and
November 29, 1999 -- -- 7,868 -- 7,868
Common stock issued for
services at $2.00 per share
on August 30, 1999 5,000 10,000 -- -- 10,000
Net loss - 1999 -- -- -- (1,334,584) (1,334,584)
---------- ---------- ---------- ------------ -----------
BALANCE -
DECEMBER 31, 1999 69,383,580 $3,301,503 $5,770,055 $ (9,388,662) $ (317,104)
Stock options issued on
January 2, January 3,
February 3 and March 1,
2000 -- -- 5,029 -- 5,029
Majority stockholder forgave
loans to the Company on
March 31, 2000 -- -- 2,241,796 -- 2,241,796
Stock options issued on
June 5, 2000 -- -- 6,815 -- 6,815
Net loss for the period
ended September 30, 2000 -- -- -- (964,590) (964,590)
---------- ---------- ---------- ------------ -----------
BALANCE -
SEPTEMBER 30, 2000 69,383,580 $3,301,503 $8,023,695 $(10,353,252) $ 971,946
========== ========== ========== ============ ===========
</TABLE>
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UNITREND, INC. AND SUBSIDIARY
FORM 10-Q SB
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, the Company believes that the
disclosures are adequate to make the information presented not misleading.
The unaudited condensed consolidated financial statements included herein
reflect all adjustments (which include only normal, recurring adjustments) that
are, in the opinion of management, necessary to state fairly the results for the
three month period ended September 30, 2000. The results for the three month
period ended September 30, 2000 are not necessarily indicative of the results
expected for the full fiscal year.
NATURE AND SCOPE OF BUSINESS
Unitrend, Inc. (the Company) a Nevada corporation as of January, 1999, formerly
an Ohio corporation, is a development stage company formed to produce computer
enclosures for a national market. The Company was incorporated on April 11, 1996
as Versa Case, Inc. On May 15, 1996, the Company changed its name to Unitrend,
Inc. The Company's operations to date have consisted primarily of incidental
sales of computer components while the company personnel have concentrated on
the development of the enclosures. As of September 30, 2000, expenses incurred
have been primarily for administrative support, tooling and product development
of the enclosures that will ultimately be sold, which has resulted in an
accumulated deficit in the development stage of approximately $10,350,000.
On April 16, 1998, the Company formed another entity called Osborne
Manufacturing, Inc. (OMI). The Company owns sixty percent of OMI and a current
employee of OMI owns the remaining forty percent. The Company's ownership will
be reduced to forty percent, three years after the commencement of OMI's
production of the "VersaCase(R)" units for the Company and upon OMI obtaining
profitability. OMI was organized to do all of the production of "VersaCase(R)"
units as well as manufacturing for other entities. OMI is located in a single
leased facility in Wauseon, Ohio.
The Company merged with Server Systems Technology, Inc. (SSTI) effective
December 15, 1998. SSTI was the predecessor to the Company and was formed
September 27, 1994. It owns several patents that are key to the Company's
products, but otherwise has ceased its development stage operations when the
Company was formed in April, 1996. SSTI is a related party to the Company since
the two entities have common stockholders.
USE OF ESTIMATES
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, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results
could differ from these estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements are on the accrual basis of accounting and
include the financial statements of the Parent for the period ended September
30, 2000 (unaudited) and 1999, in entirety, and include the financial statements
of its 60% owned Subsidiary. All material intercompany balances and transactions
are eliminated in consolidation.
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RELATED PARTY PAYABLE
There were unsecured notes payable to the President/majority stockholder,
including interest at prime on the first business day of the year, payable in
ten equal installments after the Company is profitable for one year. As of
September 30, 2000 and December 31, 1999, the outstanding balance of the note
payable to the President/majority stockholder was $157,943 and $1,703,854,
respectively. On March 31, 2000, our President/majority stockholder forgave
loans to the Company of $2,171,854 and accrued interest of $69,942. This was
accounted for as contributed capital.
NEW ACCOUNTING PRONOUNCEMENT
In June 2000, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101B, which delayed the implementation of SAB No. 101
"Revenue Recognition in Financial Statements" until the fourth quarter of fiscal
years beginning after December 15, 1999. We do not expect the adoption of SAB
No. 101 to have an impact on our financial conditions or results of operations.
In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activites - an Amendment of SFAS
133." We do not expect the adoption of SFAS No. 138 or 133 to have an impact on
our financial conditions or results of operations.
In September 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a Replacement
of FASB Statement No. 125." We do not expect the adoption of SFAS No. 140 to
have an impact on our financial conditions or results of operations.
In October 2000, the Securities and Exchange Commission adopted the rule
"Selective Disclosure and Insider Trading." These new rules were adopted to
address three issues: the selective disclosure by issuers of material nonpublic
information; when insider trading liability arises in connection with a trader's
"use" or "knowing possession" of material nonpublic information; and when the
breach of a family or other non-business relationship may give rise to liability
under the misappropriation theory of insider trading. The rules are designed to
promote the full and fair disclosure of information by issuers, and to clarify
and enhance existing prohibitions against insider trading. We maintain the
Company is in compliance with these rules and these rules will not have an
impact on our financial conditions or results of operations.
No other accounting pronouncements have been issued that have any effect on the
Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS - THIRD QUARTER OF 2000 COMPARED TO THIRD QUARTER OF 1999
We had no net revenues during the quarter ended September 30, 2000 or the
quarter ended September 30, 1999. We expect to begin selling the VersaCase in
the second or third quarter in 2001.
We had an operating loss of $254,213 during the quarter ended September 30, 2000
as compared to a loss of $269,567 during the quarter ended September 30, 1999, a
decrease of 6%. Our loss decreased due to a reduction in selling, general and
administrative expenses and research and development costs.
Selling, general and administrative expenses decreased to $254,213 during the
quarter ended September 30, 2000 as compared to $263,044 for the quarter ended
September 30, 1999, a decrease of 3%. This change was due primarily to a
decrease in payroll and related employee benefit costs of approximately $8,000
during the quarter ended September 30, 2000 as compared to the quarter ended
September 30, 1999. These costs decreased due to a change in the Company's
staffing requirements subsequent to the quarter ended September 30, 1999.
Contract labor decreased by approximately $22,000 and professional fees
increased by approximately $20,000 due to professional assistance directly
relating to the Company's numerous filings with the United States Securities and
Exchange Commission.
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During the quarter ended September 30, 2000, there were no stock options granted
to non-employees under our 1999 Stock Option Plan. During the quarter ended
September 30, 1999, 58,270 stock options were granted to non-employees at an
exercise price of $0.50 each, under our 1999 Stock Option Plan. Options to the
non-employee consultants were recorded for $4,915 in consulting expenses based
on the fair market value of the services rendered.
RESULTS OF OPERATIONS - FIRST NINE MONTHS OF 2000 COMPARED TO FIRST NINE MONTHS
OF 1999
We had no net revenues during the nine months ended September 30, 2000 or the
nine months ended September 30, 1999. We expect to begin selling the VersaCase
in the second or third quarter in 2001.
We had an operating loss of $935,455 during the nine months ended September 30,
2000 as compared to an operating loss of $712,455 during the nine months ended
September 30, 1999, an increase of 31%. As discussed below, this operating loss
grew due to an increase in selling, general and administrative expenses.
Research and development expenses increased to $16,680 during the nine months
ended September 30, 2000 as compared to $6,523 for the nine months ended
September 30, 1999. This increase was due to a consulting fee paid during the
2000 first quarter to an international product design and consulting firm to
examine the Company's products for possible improvement and modification
suggestions prior to the commencement of full-scale production. We believe that
research and development expenses will increase as we go forward.
Selling, general and administrative expenses increased to $918,775 during the
nine months ended September 30, 2000 as compared to $705,932 during the nine
months ended September 30, 1999, an increase of 30%. This change was due
primarily to an increase in payroll and related employee benefit costs of
approximately $150,000 during the nine months ended September 30, 2000 as
compared to the nine months ended September 30, 1999. These costs increased due
to the hiring of additional employees subsequent to the nine months ended
September 30, 1999. Other significant increases in officers' insurance,
professional fees, building and related costs and depreciation were
approximately $25,000, $30,000, $10,000 and $5,000, respectively. The Company
saw decreases of approximately $20,000 in contract labor and computer supplies
during the nine months ended September 30, 2000 as compared to the nine months
ended September 30, 1999.
During the nine months ended September 30, 2000, 78,102 stock options were
granted to non-employees at an exercise price of $0.50 each, under our 1999
Stock Option Plan. Options to the non-employee consultants were recorded for
$11,844 in consulting expenses based on the fair market value of the services
rendered.
We had an increase in plant, property and equipment of $77,499 due to the
purchase of furniture, fixtures, computer equipment and software as well as
additional tooling and dies under construction. Accrued expenses increased to
$360,709 for the nine months ended September 30, 2000 compared to $14,922 at
years end December 31, 1999. Since April 1, 2000, the employees have agreed to
defer compensation for their services until such a time that the Company's cash
flow deficiencies are satisfied. This will occur upon approval of the Company's
registration statements with the Securities and Exchange Commission. The note
payable to our President/majority stockholder decreased to $157,943 during the
nine months ended September 30, 2000 because he forgave prior years loans of
$2,171,854 and the associated interest of $69,942. This was accounted for as
contributed capital.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through public
and private sales of equity securities, as well as through loans from its
President/majority stockholder, Conrad A.H. Jelinger. As of September 30, 2000,
the Company's cash totaled $1,231. Loans from the Mr. Jelinger during the nine
months ended September 30, 2000 totaled $625,943. On March 31, 2000, our
President/majority stockholder forgave loans to the Company of $2,171,854 and
accrued interest of $69,942. This was accounted for as contributed capital.
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Primary uses of cash and cash equivalents for the nine months ended September
30, 2000 included $543,064 for the Company's operations and working capital
requirements, payments on notes payable of $12,928, and purchases of property
and equipment of $77,499.
The Company's future cash requirements will depend upon numerous factors,
including the amount of revenues generated from operations (if any), the cost of
the Company's sales and marketing activities and the progress of the Company's
research and development activities, none of which can be predicted with
certainty. The Company will continue to seek additional funding following this
period ended September 30, 2000. On September 15, 2000, the Company received
approval of its Form 10-12B/A registration statement with the Securities and
Exchange Commission filed on August 30, 2000. Following this approval, the
Company filed an S-8 to register stock options on September 25, 2000. The
Company will meet its funding requirements for the tooling costs, operating
costs and other funding requirements through loans by the majority stockholder
as well as raising additional equity through a registration of its securities
with the Securities and Exchange Commission. Management expects these documents
to be submitted for approval by the end of the fourth quarter 2000. There can be
no assurance any additional funding will be available on acceptable terms, or at
all. Moreover, if additional financing is not available, the Company could be
required to reduce or suspend its operations, seek an acquisition partner or
sell securities on terms that may be highly dilutive or otherwise
disadvantageous to current shareholders. The Company may in the future
experience operational difficulties and delays in its production development due
to working capital constraints. Any such difficulties or delays could have a
material adverse effect on the Company's business, financial condition and
results of operation.
YEAR 2000 ISSUES
The Company experienced no significant problems or malfunctions relating to the
Year 2000 situation during the nine months ended September 30, 2000. Therefore,
the Company had no costs relating to this issue during this period.
OUTLOOK
The outlook section contains a number of forward-looking statements, all of
which are based on current expectation. Actual results may differ materially.
Our growth strategy is built around five imperatives: maintaining technology
leadership; increasing market share; acquisition of other business entities;
leveraging strategic relationships; and the recruiting and retention of key
personnel.
MAINTAINING TECHNOLOGY LEADERSHIP. The cutting edge of our effort to achieve
technological leadership is to establish a standard for open architecture and
modularity in the computer enclosure industry. Other components, accessories,
and products are in various stages of development. They will be supported by an
aggressive research and development budget.
INCREASING MARKET SHARE. Our entry into the market is estimated at a modest
level to allow us to grow at a reasonable pace. However, we make no
representations or guarantees that we will be able to manage the growth of our
business. Once VersaCase is introduced, we expect that there will be significant
interest across a number of market segments. The VersaCase is unparalleled in
its versatile application as a PC or server enclosure. The ease of access and
scalability will provide numerous benefits to routine and mission-critical users
that will propel and increase market share.
ACQUISITION OF OTHER BUSINESS ENTITIES. In order to expand our technological and
market capabilities, we may consider the pursuit of other companies. Such
acquisitions may include core and non-core entities. A core entity may be a
research and development group, and a non-core firm could be one that might
enhance our production process.
LEVERAGING STRATEGIC RELATIONSHIPS. We intend to leverage our relationship with
companies that complement our mission. For instance, the uniqueness of VersaCase
technology will create opportunities for us to establish strong relationships
with key distributors. These distributors will be able to offer their clients a
product that is very competitive and distinctive. We have been approached by
distributors to consider a channel relationship or exclusive position with them.
While we must maintain a
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broader market focus, we may selectively enter into agreements that would
enhance market credibility and penetration.
RECRUITMENT AND RETENTION OF KEY PERSONNEL. An entrepreneurial spirit that was
based in creativity, risk and reward drove the birth of this company. We intend
to maintain this quality by offering competitive salary and incentive
compensation. Our overriding human resources philosophy is to build a corporate
culture that supports the success of each employee, as well as the company.
Part II. Other Information
Item 1. Legal Proceedings
The Company was served with notice of a lawsuit filed in the United States
District Court for Hawaii on April 24, 2000. Two former employees, spouses to
each other, are suing for the return of their investment of $250,000, based upon
Hawaiian State securities law. The Company believes this lawsuit has no merit
and intends to vigorously defend itself.
Item 2. Changes In Securities And Use Of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission Of Matters To A Vote Of Security Holders
Not Applicable
Item 5. Other Information
In the third quarter 2000 we parted ways with our Interim Chief Financial
Officer, Michael Wiegand, and our Vice President of Marketing, Terence J.
Langenderfer. We agreed with Mr. Wiegand that he would fill the Chief Financial
Officer position on a temporary basis. With that understanding, he left us to
pursue other interests shortly after his interim status ended. Mr.
Langenderfer's departure was precipitated on a difference in business philosophy
between himself and our upper management. We do not anticipate that the
departure of these individuals will negatively impact our business performance
in a material way.
Item 6. Exhibit
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Unitrend,
Inc. has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNITREND, INC.
Dated: November 13, 2000 By: /s/ CONRAD A.H. JELINGER
----------------------------
Conrad A.H. Jelinger
Chief Executive Officer, Interim Chief
Financial Officer and President
11
