<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For The Quarter Ended April 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 1-14503
DECTRON INTERNATIONALE INC.
---------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Quebec, Canada N/A
-------------- ---
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4300 Poirier Blvd., Montreal H4R 2C5
---------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 514-334 9609
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 [ ]
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: April 26, 2000, 2,795,000
Common Shares outstanding
Transitional Small Business Disclosure (check One):
Yes [_] No [X]
<PAGE>
DECTRON INTERNATIONALE INC.
INDEX
-----
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1- FINANCIAL STATEMENTS
Interim Consolidated Balance Sheet - April 30, 2000..............................................2-3
Interim Consolidated Statements of Earnings - For the three months ended April
30, 2000
and the three months ended April 30, 1999 .......................................................4-5
Interim Consolidated Statements of Cash Flows - For the three months ended April
30, 2000
and three months ended April 30, 1999............................................................6-8
Interim Consolidated Statements of Stockholders' Equity............................................9
Interim Notes to Financial Statements..........................................................10-26
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS...................................................27
PART II - OTHER INFORMATION
ITEM 2 - CHANGES IN SECURITIES....................................................................28
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.........................................................28
SIGNATURES....................................................................................... 29
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT APRIL 30, 2000
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT APRIL 30, 2000
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Interim Consolidated Balance Sheets 2 - 3
Interim Consolidated Statements of Earnings 4-5
Interim Consolidated Statements of Cash Flows 6 - 8
Interim Consolidated Statements of Stockholders' Equity 9
Interim Notes to Consolidated Financial Statements 10 - 26
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 2000 AND JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ----------------
A S S E T S
CURRENT
<S> <C> <C>
Cash 359,199 220,562
Accounts receivable (note 3) 8,010,173 7,626,840
Inventory (note 4) 8,817,174 8,169,607
Prepaid expenses and sundry assets 1,193,065 1,062,973
Deferred income taxes 63,682 85,699
--------------- ----------------
18,443,293 17,165,681
LOANS RECEIVABLE (note 5) 126,777 179,939
PROPERTY, PLANT AND EQUIPMENT (note 6) 10,483,674 7,673,802
DEPOSIT ON BUILDING - 1,000,000
INTANGIBLES (note 7) 95,616 99,218
GOODWILL (note 8) 1,674,226 1,759,297
DEFERRED INCOME TAXES 126,635 107,152
--------------- ----------------
30,950,221 27,985,089
=============== ================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statement
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 2000 AND JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
-------------- ---------------
L I A B I L I T I E S
<S> <C> <C>
CURRENT
Bank loans (note 9) 5,834,368 5,616,167
Accounts payable and accrued expenses (note 10) 5,906,351 5,096,977
Income taxes payable 86,070 140,361
Current portion of long-term debt (note 11) 1,611,055 1,263,073
Current portion of deferred revenue (note 14) 233,232 228,079
-------------- ---------------
13,671,076 12,344,657
LONG-TERM DEBT (note 11) 6,614,608 4,657,838
DUE TO DIRECTOR (note 12) 34,286 51,905
LOAN PAYABLE (note 13) 258,112 275,057
-------------- ---------------
DEFERRED REVENUE (note 14) 752,983 732,158
-------------- ---------------
21,331,065 18,061,615
-------------- ---------------
STOCKHOLDERS' EQUITY
CAPITAL STOCK (note 15) 6,849,609 6,849,609
TREASURY STOCK (88,780) (88,780)
ACCUMULATED OTHER COMPREHENSIVE INCOME (261,099) 289,121
RETAINED EARNINGS 3,119,426 2,873,524
--------------- ---------------
9,619,156 9,923,474
--------------- ---------------
30,950,221 27,985,089
=============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE THREE
MONTHS MONTHS
ENDED ENDED
APRIL 30, APRIL 30,
2000 1999
--------------- ---------------
$ $
<S> <C> <C>
Net sales 8,626,887 7,316,795
Cost of sales 5,736,210 5,156,786
--------------- ---------------
Gross profit 2,890,677 2,160,009
--------------- ---------------
Operating expenses
Selling 1,317,161 858,608
General and administrative 586,036 406,402
Depreciation and amortization 340,661 253,184
Interest expense 297,208 88,412
--------------- ---------------
2,541,066 1,606,606
--------------- ---------------
Income before income taxes 349,611 553,403
Income taxes 103,709 184,855
--------------- ---------------
Net Income 245,902 368,548
=============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED APRIL 30, 2000 AND YEAR ENDED JANUARY 31, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS YEAR
ENDED ENDED
APRIL 30, JANUARY 31,
2000 2000
--------------- ----------------
$ $
<S> <C> <C>
Net sales 8,626,887 31,402,954
Cost of sales 5,736,210 20,168,656
--------------- ----------------
Gross profit 2,890,677 11,234,298
--------------- ----------------
Operating expenses
Selling 1,317,161 5,270,656
General and administrative 586,036 2,065,155
Depreciation and amortization 340,661 1,187,662
Interest expense 297,208 674,287
--------------- ----------------
2,541,066 9,197,760
--------------- ----------------
Income before income taxes 349,611 2,036,538
Income taxes 103,709 909,775
--------------- ----------------
Net Income 245,902 1,126,763
=============== ================
Net income per common stock
0.09 0.40
=============== ================
Number of common stock outstanding 2,795,000 2,795,000
=============== ================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED APRIL 30,
APRIL 30, 1999
2000
--------------------- ------------------
$ $
<S> <C> <C>
Cash flows from operating activities:
Net income 245,902 368,548
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 340,661 253,184
Increase in accounts receivable (383,333) (1,144,121)
Increase in inventory (647,567) (453,337)
Increase in prepaid expenses and sundry assets (130,092) (522,141)
Increase in accounts payable and accrued expenses 809,374 312,325
Increase (decrease) in income taxes payable (54,291) 70,683
Increase in deferred revenue 25,978 66.881
Increase (decrease) in deferred income taxes (2,534) 15,800
--------------------- ------------------
Net cash (used in) provided by operating activities 204,098 (1,032,178)
--------------------- ------------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS THREE
ENDED MONTHS
APRIL 30, ENDED APRIL 30,
2000 1999
----------------- ---------------
$ $
<S> <C> <C>
Cash flows from investing activities:
Acquisition of property, plant and equipment (3,056,792) (389,482)
Deposit on building 1,000,000 --
----------------- ---------------
Net cash used in investing activities (2,056,792) (389,482)
Cash flows from financing activities:
(Advances to ) repayments from directors (17,619) --
(Advances to) repayments from corporate shareholders -- 39,310
(Advances to) repayments from loan receivable 53,162 --
Advance from (repayments of) bank loans 218,201 1,186,829
Advances from (repayments of) notes payables -- (131,975)
Advances from (repayments of) other loan payable -- (64,553)
Advances from (repayments of) long-term debt 2,304,752 (153,609)
Advances from (repayment of) loan payable. (16,945) --
----------------- ---------------
Net cash provided by financing activities 2,541,551 876,002
Effect of foreign currency exchange rate changes (550,220) 155,956
----------------- ---------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDING APRIL 30, 2000 AND APRIL 30, 1999
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS THREE
ENDED APRIL 30, MONTHS
2000 ENDED APRIL 30,
1999
--------------- ----------------
$ $
<S> <C> <C>
NET INCREASE (DECREASE IN CASH AND
CASH EQUIVALENTS 138,637 (389,702)
Cash and cash equivalents, beginning of year 220,562 389,702
--------------- ----------------
CASH AND CASH EQUIVALENTS, END OF YEAR 359,199 --
=============== ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid 241,902 85,808
=============== ================
Income taxes paid 164,512 244,646
=============== ================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS PERIOD ENDING APRIL 30, 2000
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
Cumulative Other
Retained Comprehensive Treasury
Number Amount Earnings Income Stock
---------- ----------- ----------- ------------- --------
$ $ $
<S> <C> <C> <C> <C> <C>
Balance January 31, 1998 91,267 1,934,695 617,580 (94,777) --
Redemption of shares (91,267) (1,934,695) -- -- --
Issuance of common shares 2,795,000 8,421,450 -- -- --
Cost of issuance -- (1,553,921) -- -- --
Foreign currency translation -- -- -- 27,110 --
Net income for the year -- -- 1,129,181 -- --
---------- ----------- ----------- ------------- --------
Balance January 31, 1999 2,795,000 6,867,529 1,746,761 (67,667) --
Purchase of 20,000 common shares -- -- -- -- (88,780)
Share purchase plan receivable -- (499,946) -- -- --
Deferred tax benefit -- 482,026 -- -- --
Foreign currency translation -- -- -- 356,788 --
Net Income for the year -- -- 1,126,763 -- --
---------- ----------- ----------- ------------- --------
Balance January 31, 2000 2,795,000 6,849,609 2,873,524 289,121 (88,780)
========== =========== =========== ============= ========
Net income for period ended
April 30, 2000 -- -- 245,902 -- --
Foreign currency translation -- -- -- (550,220) --
---------- ----------- ----------- ------------- --------
Balance April 30, 2000 2,795,000 6,849,609 3,119,426 (261,099) (88,780)
========== =========== =========== ============= ========
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Consolidated Financial Statements Presentation
These consolidated financial statements include the accounts
of Dectron Internationale Inc., Dectron Inc. Consolidated and
Circul-aire Group.
Dectron Inc. Consolidated is comprised of Dectron Inc. and of
its wholly-owned subsidiaries, Refplus Inc., Thermoplus Air
Inc., Fiber Mobile Ltd., Dectron U.S.A. Inc. and IPAC 2000
Inc.
Circul-aire Group is comprised of 9048-3140 Quebec Inc. and
Cascade Technologies Inc., and of its wholly-owned
subsidiaries, PM Wright Ltd., Purafil Canada Inc. and 122248
Canada Inc.
All inter-company profits, transactions and account balances
have been eliminated.
b) Principal Activities
The company Dectron Internationale Inc. was incorporated on
March 30, 1998. These companies are principally engaged in the
production of dehumidification, refrigeration, indoor air
quality (IAQ), ventilation, air conditioning and air
purification systems in Canada and its distribution world
wide. The activities of Dectron Internationale Inc., Cascade
Technologies Inc., 9048-3140 Quebec Inc. are immaterial in the
aggregate, as their only activity is to hold the investments
in the operating companies.
c) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, amounts due
from banks and any other highly liquid investments purchased
with a maturity of three months or less. The carrying amounts
approximate fair value because of the short maturity of these
instruments.
d) Revenue Recognition
Contract revenue is accounted for under the percentage of
completion method prorated on units produced. When a terminal
loss on a contract can be reasonably estimated, the total
estimated amount of the loss is charged to income for the
year.
e) Inventory
Inventory of raw materials is valued at the lower of cost and
replacement cost and inventory of work-in-process and finished
goods at the lower of cost and net realizable value. Cost is
determined on the first-in, first-out basis.
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f) Property, Plant and Equipment
Property, plant and equipment are recorded at cost and are
depreciated or amortized on the basis of their estimated
useful lives at the undernoted rates and methods:
<TABLE>
<S> <C> <C>
Building 4 or 5% Straight-line
Machinery and equipment 10% Straight-line or 20% declining
balance
Furniture and fixtures 15 or 20% Straight-line or 20% declining
balance
Computer equipment 15 or 30% Straight-line 0r 30% declining
balance
Rolling stock 30% Straight-line or 30% declining
balance
Equipment under capital leases 20 or 30% Declining balance
Leasehold improvements Straight-line over term of the lease
</TABLE>
Depreciation and amortization for assets acquired during the
year are recorded at one-half of the indicated rates.
g) Intangibles
Intangibles represent patents and trademarks costs. These
intangibles are being amortized on the straight-line basis
over a fifteen year period.
h) Goodwill
Goodwill is the excess of cost over the value of net assets
acquired. It is amortized on the straight-line basis over ten
years.
i) Deferred Revenue
The company has sold extended warranty contracts covering a
period of four years beyond the one year basic guarantee. The
deferred revenue is recognized as income over the four year
period on a straight-line basis commencing one year from the
sale of the contracts.
j) Income Taxes
The company accounts for income taxes under the provisions of
statement of FAS No. 109, which requires recognition of
deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the
financial statements and tax returns. Deferred income taxes
are provided using the liability method. Under the liability
method, deferred income taxes are recognized for all
significant temporary differences between the tax and
financial statements basis of assets and liabilities.
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k) Foreign Currency Translation
The company maintains its books and records in Canadian
dollars. The operation of the company's subsidiary in the
United States is an integrated corporation. As a result,
monetary assets and liabilities in foreign currency are
translated into Canadian dollars at exchange rates in effect
at the balance sheet date, whereas non-monetary assets and
liabilities are translated at the average exchange rates in
effect at transaction dates. Revenues and expenses in foreign
currency are translated at the average rate effective during
the year with the exception of depreciation, which is
translated at the historical rate. Gains and losses resulting
from the translation of foreign currency transactions are
included in earnings.
The translation of the financial statements from Canadian
dollars ("CDN $") into United States dollars is performed for
the convenience of the reader. Balance sheet accounts are
translated using closing exchange rates in effect at the
balance sheet date and income and expense accounts are
translated using an average exchange rate prevailing during
each reporting period. No representation is made that the
Canadian dollar amounts could have been, or could be,
converted into United States dollars at the rates on the
respective dates and or at any other certain rates.
Adjustments resulting from the translation are included in the
accumulated other comprehensive income in stockholder's
equity.
l) Earnings Per Share
The company has adopted FAS No. 128, "Earnings per Share"
which requires disclosure on the financial statements of
"basic" and "diluted" earnings per share. Basic earnings per
share is computed by dividing net earnings by the weighted
average number of common shares outstanding for the year.
Diluted earnings per share is computed by dividing net
earnings by the weighted average number of common shares
outstanding plus common stock equivalents (if dilutive)
related to Warrants for each year. The "basic" and "diluted"
earnings per share are the same because the exercise price is
greater than the average stock price for the year.
m) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles in the United States
of America requires management to make estimates and
assumptions that effect certain reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n) Long-lived Assets
The company adopted the provisions of FAS No. 121, Accounting
for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of. FAS No. 121 requires that long-lived
assets held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Management
used its best estimate of the undiscounted cash flows to
evaluate the carrying amount and have determined that no
impairment has occurred.
o) Recently Issued Accounting Standard
In June 1998, FAS No. 133 was issued with respect to
Accounting for Derivative Instruments and Hedging activities.
The requirements of FAS No. 133 was extended to fiscal years
beginning January 1, 2001 by FAS No. 137. The company
anticipates that adoption of FAS No. 137 will initially affect
comprehensive income.
2. COMPREHENSIVE INCOME
The company has adopted FAS No. 130 "Reporting Comprehensive Income"
which requires new standards for reporting and display of comprehensive
income and its components in the financial statements. However, it does
not affect net earnings or total stockholders' equity. The components
of comprehensive income are as follows:
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ---------------
<S> <C> <C>
NET EARNINGS 245,902 1,126,763
OTHER COMPREHENSIVE INCOME
Foreign currency translation (550,220) 356,788
--------------- ---------------
COMPREHENSIVE INCOME (304,318) 1,483,551
=============== ===============
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
3. ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
APRIL 30, 2000 JANUARY 31, 2000
$ $
--------------- ----------------
<S> <C> <C>
Accounts receivable 8,118,982 7,786,400
Less: Allowance for doubtful accounts 108,809 159,560
--------------- ----------------
Accounts receivable - net 8,010,173 7,626,840
=============== ================
4. INVENTORY
Inventory is comprised of the following:
APRIL 30, 2000 JANUARY 31, 2000
$ $
--------------- ----------------
Raw materials 6,337,631 4,995,391
Work-in-process 1,170,900 1,676,899
Finished goods 1,308,643 1,497,317
--------------- ----------------
8,817,174 8,169,607
=============== ================
5. LOANS RECEIVABLE
The loans receivable consist of the following:
APRIL 30, 2000 JANUARY 31, 2000
$ $
--------------- ----------------
Loan receivable - private companies 99,200 151,813
Loan receivable - corporate shareholder 27,577 28,126
--------------- ----------------
126,777 179,939
Current portion -- --
--------------- ---------------
126,777 179,939
=============== ===============
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
6. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
APRIL 30, 2000 JANUARY 31, 2000
$ $
--------------- ----------------
<S> <C> <C>
Land 486,065 239,457
Building 5,101,141 2,556,424
Machinery and equipment 7,209,809 7,055,701
Furniture and fixtures 639,737 650,993
Computer equipment 1,454,844 1,452,354
Rolling stock 161,716 106,629
Equipment under capital leases 531,652 542,239
Leasehold improvements 569,167 564,159
--------------- ----------------
Cost 16,154,131 13,167,956
--------------- ----------------
Less accumulated depreciation and amortization:
Building 390,808 354,986
Machinery and equipment 3,112,598 2,997,693
Furniture and fixtures 448,344 447,258
Computer equipment 1,043,527 1,032,455
Rolling stock 54,600 49,967
Equipment under capital leases 260,850 251,508
Leasehold improvements 359,730 360,287
--------------- ----------------
5,670,457 5,494,154
--------------- ----------------
Net 10,483,674 7,673,802
=============== ================
Depreciation and amortization of property, plant and equipment for the
Three Months period ended April 30, 2000 amounted to $340,661 ($982,210 in
2000).
7. INTANGIBLES
APRIL 30, 2000 JANUARY 31, 2000
$ $
--------------- ----------------
Patents and trademarks costs 101,764 101,764
Less: Accumulated amortization 6,148 2,546
--------------- ----------------
Net 95,616 99,218
=============== ================
</TABLE>
Amortization of intangibles for the Three Months Period ended April 30, 2000
amounted to $3,602 ($2,546 in 2000).
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
8. GOODWILL
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ---------------
<S> <C> <C>
Cost 2,028,787 2,069,190
Less: Accumulated amortization 354,561 309,893
--------------- ---------------
Net 1,674,226 1,759,297
=============== ===============
</TABLE>
Amortization of goodwill for the Three Months Period ended April 30, 2000
amounted to $44,669 ($202,906 in 2000).
9. BANK LOANS
The company has an available line of credit of $10,033,190 bearing
interest between 0.25% and 0.5% per annum over the prime lending rate and
it is renegotiated annually.
Bank loans are secured by a moveable hypothec on accounts receivable,
inventory and commercial equipment, by a $4,053,780 hypothec on all assets
of the company, including a first ranking hypothec in the amount of
$4,053,780 on the proceeds of all risks insurance on the property and by a
solitary guarantee in the amount of $3,378,150 bearing interest between
0.5% and 1% per annum over the prime lending rate with interest payable on
a monthly basis. The bank loans are renegotiated annually.
The company finances its operations mainly through the use of Banker's
Acceptance bearing an average lending rate of less than prime.
The average cost of financing for fiscal year 2000 was 8.19% (7.16% in
1999).
10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ----------------
Accounts payable and accrued expenses are comprised of the
following:
<S> <C> <C>
Trade payable 5,001,420 3,469,390
Accrued expenses 904,931 1,627,587
--------------- ----------------
5,906,351 5,096,977
=============== ================
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
11. LONG-TERM DEBT
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ---------------
<S> <C> <C>
a) Government loans, without guarantee nor interest, repayable 15 years
after their date of receipt, the first portion of $31,079 is
repayable in August 2002 and the second portion of $31,079 is
repayable in July 2004. 62,158 63,396
b) Immigration loans secured by a first ranking universal hypothec on
the universality of the property, moveable and immovable, present and
future, corporeal and incorporeal, bearing interest at variable rates
from 5.21% to 5.59% per annum, due on different dates between
November 2002 and May 2004. The loans are net of sinking funds since
all amounts paid into them must be used to repay the loans.
1,148,407 1,213,966
c) Obligation under capital lease for rolling stock subject to blended
monthly payments of $434, up to August 2003. 17,200 18,783
d) Bank term loan secured by a first ranking universal hypothec on the
universality of the property, moveable and immovable, present and
future and corporeal and incorporeal, bearing interest at 7.99% per
annum repayable in monthly capital repayments of $564 plus a final
repayment of $68,060 in December 2002.
85,548 88,978
e) Bank term loan bearing interest at 7% per annum, repayable in
monthly capital repayments of $376, maturing June 2014. 63,431 65,843
--------------- ---------------
Balance carried forward 1,376,744 1,450,966
--------------- ---------------
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
11. LONG-TERM DEBT (Continued)
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ----------------
<S> <C> <C>
Balance brought forward 1,376,744 1,450,966
f) Bank loan, bearing interest at prime plus 1% per annum repayable in
monthly capital repayments of $1,514, maturing April 2002.
36,328 41,685
g) Bank loan, bearing interest at prime rate plus 1% per annum,
repayable in monthly capital repayments of $5,137 and a final
repayment of $5,143 plus interest, maturing November 2001.
97,618 115,281
h) Loan from Societe Developpement Industriel du Quebec bearing interest
at a rate of approximately prime plus 1.50% which is deferred and
capitalized for the minimum of either 12 months or when the
accumulated interest is greater than 10% of the loan advance,
repayable in annual payments commencing June 30, 1997 at a rate of
15% of the prior year's net income to a maximum of $33,781 per annum.
10,752 45,421
i) Obligation under capital leases for machinery and equipment with
carrying value of $285,054 repayable by 2 remaining equal payments of
$8,012 and 14 remaining equal payments of $5,788 including imputed
interest of 7.64% and 7.24% respectively plus a purchase option of
$61,532 and $44,799 maturing April 2000 and April 2001
respectively. 130,870 198,536
j) Government loan of an original amount of $209,364, without guarantee
nor interest, repayable in 4 equal annual installments starting at
the latest on December 1, 1997, maturing in December 2000.
52,341 53,383
k) Small business investment loan, secured by machinery and equipment,
repayable in monthly installments of $2,500 and a final repayment of
$1,149, bearing interest at prime plus 1.75%, maturing March 2000. -- 3,721
--------------- ----------------
Balance carried forward 1,704,653 1,908,993
--------------- ----------------
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
11. LONG-TERM DEBT (Continued)
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
---------------- -----------------
<S> <C> <C>
Balance brought forward 1,704,653 1,908,993
l) Bridge loan secured by a first ranking hypothec with delivery of all 4,000,000 4,000,000
shares of its wholly-owned subsidiaries and an unconditional letter of
guarantee, bearing interest at the Banker's American base rate plus 3%,
renegotiated subsequent to year-end.
m) Mortgage note secured by land and building with a carrying value of $ 1,582,351 --
1,850,000 bearing interest at prime plus 0.75% per annum repayable in
monthly capital repayments of $ 9,178, maturing March 1, 2005
n) Equipment note secured by machinery and equipment bearing interest at 399,233 --
prime plus 0.75% per annum repayable in monthly capital repayments of $
6,767 maturing March 1, 2005
o) Obligation under capital lease for rolling stock with a carrying value of 66,485 --
$55,402 payable by 60 monthly payments of $ 1,100 maturing May 28, 2005
p) Demand loan secured by company's assets bearing interest at prime plus 1%, 472,941 --
Interest is payable monthly, capital on demand
q) Other -- 11,918
---------------- -----------------
8,225,663 5,920,911
Less: Current portion 1,611,055 1,263,073
---------------- -----------------
6,614,608 4,657,838
================ =================
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
11. LONG-TERM DEBT (Continued)
<TABLE>
Future principal payment obligations are as follows:
<S> <C>
2001 $ 1,611,055
2002 445,346
2003 877,937
2004 695,491
2005 and thereafter 4,595,834
----------------
$ 8,225,663
================
</TABLE>
On February 23, 2000 the bank loan (see note 11-l) was renegotiated and a
term loan in the amount of $2,527,000 bearing interest at the Banker's
American Prime Rate plus 1%, was granted for a term of five years. A
mezzanine loan in the amount of $1,000,000 bearing interest at the Bank's
American Prime Rate plus 3% was also granted for a term of three years.
These loans are secured by a first and second ranking universal hypothec
in the amount of $4,053,780 on all the moveable and immoveable, present
and future of two of its wholly-0wned subsidiaries and an unconditional
letter of guarantee in the amount of $3,527,000.
12. DUE TO DIRECTOR
The amount due to director is unsecured, non-interest bearing and is due
on April 15, 2002.
13. LOAN PAYABLE
This loan payable is non-interest bearing and is owed to private
companies, due on April 15, 2002.
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
14. DEFERRED REVENUE
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ---------------
<S> <C> <C>
Deferred revenue 986,215 960,237
Current portion 233,232 228,079
--------------- ---------------
752,983 732,158
=============== ===============
</TABLE>
Deferred revenue will be recognized as income as follows:
<TABLE>
<S> <C>
2001 $ 233,232
2002 251,420
2003 212,751
2004 169,569
2005 119,243
---------------
$ 986,215
===============
</TABLE>
15. CAPITAL STOCK
a) Authorized
An unlimited number of preferred shares, non-cumulative, voting, no par
value
An unlimited number of common shares, voting, no par value
b) Issued
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
2000 2000
$ $
--------------- ---------------
<S> <C> <C>
2,795,000 common shares 6,849,609 6,849,609
=============== ===============
</TABLE>
c) On October 5, 1998 the company issued 1,000,000 common shares in an
Initial Public Offering (the "IPO") for gross proceeds of $6,000,000
and 1,000,000 Warrants for $125,000 less underwriting commission and
other expenses of $1,516,521 ($866,120 net of income taxes
recoverable).
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
15. CAPITAL STOCK (Continued)
On November 15, 1998 the company issued and additional 45,000 common
shares for gross proceeds of $270,000 and 150,000 Warrants for $18,750
less underwriting commission and other expenses of $37,400.
Immediately prior to the "IPO" the company issued 1,750,000 common
shares for a share for share exchange valued at $1,596,433.
d) Purchase Warrants
During the fiscal year 1999, Purchase Warrants ("Warrants") were issued
pursuant to a Warrant Agreement between the company and J.P. Turner &
Company, L.L.C. and Klein Maus and Shire Incorporated. Each Warrant
entitles its holders to purchase, during the four year period
commencing on October 5, 1999, one share of common stock at an exercise
price of $9.00 per share, subject to adjustment in accordance with the
anti-dilution and other provision referred to below.
The Warrants may be redeemed by the company at any time commencing one
year from October 5, 1999 (or earlier with the consent of the
representatives) and prior to their expiration, at a redemption price
of $0.125 per Warrant, on not less that 30 days prior written notice to
the holders of such Warrants, provided that the closing bid price of
the common stock, if traded on the Nasdaq SmallCap Market, or the last
sale price of the common stock, if listed on the Nasdaq National Market
or on a national exchange, is at least 133% ($12.00 per share, subject
to adjustment) of the exercise price of the Warrants for a period of 30
consecutive trading days ending on the third day prior to the date the
notice of redemption is given. Holders of Warrants shall have exercise
rights until the close of the business day preceding the date fixed for
redemption.
The exercise price and the number of shares of common stock purchasable
upon the exercise of the Warrants are subject to adjustment upon the
occurrence of certain events, including stock dividends, stock splits,
combinations or classification of the common stock. The Warrants do not
confer upon holders any voting or any other rights of shareholders of
the company.
No Warrant will be exercisable unless at the time of exercise the
company has filed with the Commission a current prospectus covering the
issuance of common stock issuable upon the exercise of the Warrant and
the issuance of shares has been registered or qualified or is deemed to
be exempt from registration or qualification under the securities laws
of the state of residence of the holder of the Warrant. The company has
undertaken to use its best efforts to maintain a current prospectus
relating to the issuance of shares of common stock upon the exercise of
the Warrants until the expiration of the Warrants, subject to the terms
of the Warrant Agreement. While it is the company's intention to
maintain a current prospectus, there is no assurance that it will be
able to do so
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
15. CAPITAL STOCK (Continued)
e) Employee Stock Option Plan
The company has adopted a Stock Option Plan (the "Plan")
pursuant to which 650,000 shares of Common Stock are reserved
for issuance, 349,000 options are currently issued and
outstanding.
On September 2, 1999, the Board granted options under a Stock
Option Plan to certain members of the Board and certain
employees. Subject to certain limitations, the options granted
are exercisable one year after issuance. Subsequent to the
one-year anniversary date of the grant, the option holders may
exercise the option up to 25% of the total options per year
for the following four years. Each of the options will be
fully exercisable on November 4, 2003, and expire on November
4, 2004. The exercise price of the option is $3.00.
The Plan is administered by the Board of Directors, who will
determine, among other things, those individuals who shall
receive options, the time period during which the options may
be partially or fully exercised, the number of shares of
Common Stock issuable upon the exercise of the options and the
option exercise price.
The Plan is effective for a period of five years, expiring in
2003. Options may be granted to officers, directors,
consultants, key employees, advisors and similar parties who
provide Dectron with their skills and expertise. Options
granted under the Plan may be exercisable for up to five year,
and shall be at an exercise price all as determined by the
Board. Options are non-transferable except by the laws of
descent and distribution or a change in control of Dectron, as
defined in the Plan, and are exercisable only by the
participant during his or her lifetime. Change in control
includes (i) the sale of substantially all of the assets of
Dectron and merger or consolidation with another company, or
(ii) a majority of the Board changes other than by election by
the stockholders pursuant to Board solicitation or by
vacancies filled by the Board caused by death or resignation
of such person.
If a participant ceases affiliation with Dectron by reason of
death, permanent disability or retirement at or after age 70,
the option remains exercisable for one year from such
occurrence but not beyond the option's expiration date. Other
types of termination allow the participant three months to
exercise, except for termination for cause, which results in
immediate termination of the option.
Option under the Plan must be issued within five years from
the effective date of the Plan.
Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed by Dectron become available
again for issuance under the Plan.
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
15. CAPITAL STOCK (Continued)
The Plan may be terminated or amended at any time by the Board
of Directors, except that the number of shares of Common Stock
reserved for issuance upon the exercise of options granted
under the Plan may not be increased without consent of our
stockholders.
f) Share Purchase Plan Receivable
The SEC staff Accounting Bulletins require that accounts or
notes receivable arising from transactions involving capital
stock should be presented as deductions from shareholders'
equity and not as assets. Accordingly, in order to comply with
U.S. GAAP shareholders' equity has been reduced by $499,946 at
January 31, 2000, to reflect the loans due from certain
employees and officers which relate to the purchase of common
shares of the company.
g) During fiscal 2000, the company purchased 20,000 common shares
as treasury stock for $88,780
16. INCOME TAXES
Provision for income taxes consists of the following:
<TABLE>
<CAPTION>
APRIL 30, APRIL 30,
2000 1999
$ $
-------------- --------------
<S> <C> <C>
a) Current 103,709 184,855
Deferred (recovered) -- --
-------------- --------------
103,709 184,855
============== ==============
</TABLE>
b) Deferred income taxes represent the tax charges derived from
temporary differences between amortization of property, plant
and equipment and recognition of deferred revenue, and the
actual amounts deducted from or added to the taxable income.
17. COMMITMENTS
a) The company is committed to payments under operating leases
for its premises totaling $899,788. Annual payments for the
next five years are as follows:
<TABLE>
<S> <C>
2001 $ 317,256
2002 194,155
2003 172,905
2004 138,000
2005 67,472
----------------
$ 889,788
================
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
17. COMMITMENTS (Continued)
b) The company is committed to make monthly payments of $13,152
into sinking funds which are given as security against the
immigration loans. The annual payments for the next five years
are as follows:
<TABLE>
<CAPTION>
<S> <C>
2001 $ 157,830
2002 157,830
2003 89,477
2004 15,810
2005 2,635
</TABLE>
c) As at April 30, 2000, the company has outstanding letters of
credit totaling $101,345.
These letters of credit were incurred in the normal course of
business.
d) The company has signed purchase orders for machinery and
equipment totaling $381,731 The equipment is expected to be
delivered within the next year. A deposit of $38,173 been
paid.
18. SEGMENTED INFORMATION
<TABLE>
<CAPTION>
APRIL 30, APRIL 30,
2000 1999
$ $
--------------- ----------------
<S> <C> <C>
a) The breakdown of sales by geographic area
is as follows:
Canada 2,398,385 2,773,600
United States of America 5,308,311 3,256,705
International 920,191 1,286,490
--------------- ----------------
8,626,887 7,316,795
=============== ================
b) The breakdown of identifiable assets by
geographic area is as follows:
APRIL 30, 2000 APRIL 30, 1999
$ $
--------------- ----------------
Canada 23,483,221 21,765,158
United States 7,467,000 -
--------------- ----------------
30,950,221 21,765,158
=============== ================
</TABLE>
<PAGE>
DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000 AND JANUARY 31, 2000 AND
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS
19. ACQUISTIONS
On September 13, 1999 the company acquired the assets of IPAC, Inc. for
$3,700,000. The allocation of the purchase price is summarized as
follows:
<TABLE>
<S> <C>
Current assets $ 1,000,000
Property and equipment 1,600,000
Deposit on building 1,000,000
Patents and trademarks 100,000
-----------------
$ 3,700,000
=================
</TABLE>
The purchase method was used to account for the acquisition. The
accompanying financial statements include the operations of the IPAC
business for the period from September 14, 1999 to January 31, 2000.
The purchase of the IPAC business was executed in two steps. The
operating assets were purchased on September 13, 1999 and the building
was purchased February 29, 2000. In order to properly reflect the
substance of the two transactions, $1,000,000 of the initial asset
purchase price has been allocated to the building purchase price based
on an appraisal of the building at the time of the acquisition.
20. FINANCIAL INSTRUMENTS
a) The fair value of cash, accounts receivable and accounts
payable approximately correspond to their book value given
their short-term maturity. The carrying amount of long-term
debt approximates fair value because interest rates are close
to market value.
b) The company has borrowed $1,418,823 in order to finance
capital acquisitions (see note 11-b). Concurrently with these
borrowings the company acquired an additional $1,621,512 of
financing, for which it issued commercial paper of $1,621,512
with similar maturity and terms, as collateral. Since this
commercial paper fully satisfies the required principal
repayments of the additional financing, they have been offset
and neither the asset nor the liability appears on the
company's balance sheet.
21. Uncertainty due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition,
similar problems may arise in some systems which use certain dates in
1999 to represent something other than a date. Although the change in
date has occurred, it is not possible to conclude that all aspects of
the Year 2000 Issue that may affect the entity, including those related
to customers, suppliers, or other third parties, have been fully
resolved.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE-MONTH PERIOD ENDED APRIL 30, 2000 COMPARED TO THREE-MONTH PERIOD ENDED
APRIL 30, 1999.
Revenues for the three-month period ended April 30, 2000 were
$8,626,888, a 17.9% increase over prior year revenues of $7,316,795. A major
part of this increase is due to the consolidation of the Company`s newly
acquired division, Ipac 2000.
Gross profit increased by $730,669 to $2,890,678 over the same period.
This represents an increase of 4.0%, expressed in relation to sales. Due to low
manufacturing costs, gross profit increased by 33.8% compared to an increase in
sales of 17.9%.
Selling and marketing expenses increased $458,553 in the three-month
period ended April 30, 2000. This increase reflects our continued emphasis on
reaching for new markets for Dectron's products. As a percentage of revenues,
selling and marketing expenses increased from 11.7% to 15.2%.
General and administrative expenses increased by $179,634 from $406,402
to $586,036. As a percentage of revenues, general and administrative increased
from 5.5% to 6.8%. The increases in both dollar and percentage reflect the costs
of integrating Ipac's general and administrative expenses in the Company's
results.
Amortization expenses increased by $87,477 from $253,184 to $340,661.
As a percentage of revenues, amortization expenses increased from 3.5% to 3.9%
Financing expenses increased by $208,796 from $88,412 to $297,208. As a
percentage of revenues, financing expenses increased from 1.2% to 3.4%
Income before income taxes was $349,612 a decrease of $203,791 compared
to the three-month period ended April 30, 1999. Relative to sales, income before
income taxes decreased from 7.5% for the three month period ended April 30, 1999
to 4.1% in the three month period ended April 30, 2000.
Provisions for income tax expenses as a percentage of taxable income
decreased from 33.4% for the 3 month period ended April 30, 1999 to 29.7% for
2000. Tax expenses decreased by $81,146 mainly because of the decrease in
taxable income.
As a result of the above factors, the Company`s net income decreased
from $368,548 to $245,902, a decrease of 33.3%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a positive net change in cash of $138,637 for the three-month
period ended April 30, 2000. The principal sources of cash were an increase of
accounts payable in the amount of $809,374 and advances from long-term debt in
the amount of $2,304,752. The principal uses of cash were increases in inventory
in the amount of $647,567 and acquisition of property, plant and equipment in
the amount of $3,056,792. For the three-month period ended April 30, 1999, the
Company had a negative net change in cash of $389,702. The principal sources of
cash were net income of $368,548 and advances of bank loans in the amount of
$1,186,829. These items were offset by an increase in accounts receivable in the
amount of
<PAGE>
$1,144,121, an increase of $522,141 in prepaid and sundry assets and a $453,338
increase in inventory
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K: None
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DECTRON INTERNATIONALE INC.
June 19, 2000 By: /s/ Mauro Parissi
------------------------
Mauro Parissi
Chief Financial Officer and Secretary
