U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended December 31, 1999
Commission file number 27859
Rad Source Technologies, Inc.
(Name of Small Business Issuer in its charter)
Florida 65-0882844
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
475 Ramblewood Drive, Coral Springs, Florida 33071
(Address of principal executive offices) (Zip Code)
(954) 755-1827
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes|_| No |X|
As of February 11, 2000, the Registrant had 2,410,040 shares of common stock,
$.001 par value per share, outstanding.
<PAGE>
INDEX
PAGE
NUMBER
Part I. Financial Information
Item I. Financial Statements
Consolidated Balance Sheets - December 31,
1999 (Unaudited) and September 30, 1999 3
Consolidated Statements of Operations - Three Months
Ended and from inception to December 31, 1999 and
1998 (Unaudited) 4
Consolidated Statements of Cash Flows - Three Months
Ended and from inception to December 31, 1999 and 1998
(Unaudited) 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 7
Part II. Other Information 8
Signatures 8
2
<PAGE>
Rad Source Technologies, Inc. and Subsidiary
Formerly Computer Vending, Inc. (a development stage company)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
---- ----
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 1,377 $ 28,044
Accounts receivable 29,792 29,792
Other receivable -- 15,000
Inventory 191,275 121,303
Prepaid expense 1,000 5,700
----------- -----------
Total current assets 223,444 199,839
Computer equipment, less accumulated depreciaiton
of $753 and $580, respectively 2,715 2,888
Long-term receivable 19,963 28,087
Security deposit 500 500
----------- -----------
$ 246,622 $ 231,314
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses 405,709 262,843
Accounts payable - stockholders 59,841 87,791
Notes payable 10,000 10,000
Due to stockholders 31,800 31,800
----------- -----------
Total current liabilities 507,350 392,434
----------- -----------
Stockholders' deficit:
Common stock, par value $.001; 50,000,000 shares
authorized; 2,410,040 issued and outstanding 2,410 2,410
Additional paid-in capital 4,414,652 4,414,652
Deficit accumulated during development stage (4,677,790) (4,578,182)
----------- -----------
Total stockholders' deficit (260,728) (161,120)
----------- -----------
$ 246,622 $ 231,314
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
Rad Source Technologies, Inc. and Subsidiary
Formerly Computer Vending, Inc. (a development stage company)
Consolidated Statement of Operations
<TABLE>
<CAPTION>
Three months ended October 11, 1996 (inception)
December 31, to December 31,
------------ ---------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 89,000 $ -- $ 149,647 $ --
Cost of sales 56,500 -- 109,650 --
----------- ----------- ----------- --------
Gross profit 32,500 -- 39,997 --
----------- ----------- ----------- --------
Expenses:
Research and development 41,358 40,000 301,246 67,362
Selling, general and administrative 90,500 40,692 722,983 328,161
Issuance of stock for services -- -- 3,567,161 --
----------- ----------- ----------- --------
Total expenses 131,858 80,692 4,591,390 395,523
----------- ----------- ----------- --------
Loss before other expense (99,358) (80,692) (4,551,393) (395,523)
Interest expense 250 2,524 10,715 2,524
Other expense -- -- 115,682 16,499
----------- ----------- ----------- --------
Net income $ (99,608) $ (83,216) $(4,677,790) (414,546)
=========== =========== =========== ========
Loss per share - basic $ (0.04) $ (0.11)
Weighted average shares outstanding 2,410,040 766,089
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Rad Source Technologies, Inc. and Subsidiary
Formerly Computer Vending, Inc. (a development stage company)
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Three months ended October 11, 1996 (inception)
December 31, to December 31,
------------ ---------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flow provided (used) by operating activities:
Net loss $ (99,608) $ (83,216) $(4,677,790) $ (414,546)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities 173 -- 3,731,787 6,400
Change in operating assets and liabilities 72,768 4,582 186,184 177,474
----------- ----------- ----------- -----------
Net cash provided (used) by operating
activities: (26,667) (78,634) (759,819) (230,672)
Cash flows from investing activities -- (3,468) --
Cash flows from financing activities -- 667,400 764,664 821,675
----------- ----------- ----------- -----------
Net increase (decrease) in cash (26,667) 588,766 1,377 591,003
Cash, beginning of period 28,044 2,237 -- --
----------- ----------- ----------- -----------
Cash, end of period $ 1,377 $ 591,003 $ 1,377 $ 591,003
----------- ----------- ----------- -----------
Supplemental disclosure:
Cash paid for interest $ -- $ -- $ 2,684 $ 1,100
Cash paid for Income taxes $ -- $ -- $ -- $ --
Payment of unsecured advances through
issuance of stock $ -- $ -- $ 54,500 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
RAD SOURCE TECHNOLOGIES, INC. AND SUBSIDIARY
FORMERLY COMPUTER VENDING, INC. (a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - UNAUDITED INTERIM INFORMATION
The accompanying interim consolidated financial data are unaudited; however, in
the opinion of management, the interim data include all adjustments necessary
for a fair presentation of the results for interim periods. 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 at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
The results of operations for the three months ended December 31, 1999 are not
necessarily indicative of the results to be expected for the year ended
September 30, 2000.
The interim unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto for the
year ended September 30, 1999 filed as part of the Company's form 10-KSB.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis of the Company's consolidated financial
condition and consolidated results of operations should be read in conjunction
with the financial statements and notes contained herein as well as the
Company's September 30, 1999 form 10-KSB.
Statements which are not historical facts, including statements about the
Company's confidence and strategies and its expectations about new and existing
products, technologies and opportunities, market and industry segment growth,
demand and acceptance of new and existing products are forward looking
statements that involve risks and uncertainties. These include, but are not
limited to, product demand and market acceptance risks, the impact of
competitive products and pricing, the results of financing efforts, the effects
of economic conditions and trade, legal, social, and economic risks, such as
licensing, and, trade restrictions; and the results of the Company's business
plan. Such forward-looking statements are subject to risks and uncertainties.
Consequently, our actual results could materially differ from those anticipated
in these forward-looking statements.
First Quarter Ended December 31, 1999 Compared to First Quarter Ended December
31, 1998
In the first quarter ended December 31, 1999, the Company sold one RS 3000 Blood
Irradiator compared to none in the comparative prior quarter. In the prior year
quarter, the Company was involved in capital raising activities and refining
components to be used in its products, the RS 3000 Blood Irradiator and the RS
2000 Biological Irradiator and did not produce any units for commercial use. In
the December 31, 1999 quarter, the Company's Selling, General, and
Administrative expenses increased by $49,808 or 122%. This increase is
reflective of the Company entering its operational phase based on the commercial
sale of its irradiation products. As such, the Company's compensation,
marketing, travel and entertainment, and professional fees have risen since the
Company is producing, delivering, and marketing its irradiation products.
Research and development expenses consist of design and refinement costs
associated with the Company's core products and possible future products. In the
prior year's comparative quarter these costs were primarily associated with
component testing and readings for the RS 3000 and the current quarter's expense
includes these costs as well as costs associated with investigating
modifications for products with alternate applications.
Management intends to aggressively pursue marketing and servicing the Company's
existing products, the RS 3000 and the RS 2000. This will require the Company to
increase operations, administrative capacity and marketing functions which is
expected to cause Selling, General and Administrative expenses to grow in the
future. However, even with additions to all of these functions, no assurances
can be made that they will result in creating revenues at a level profitable to
the Company from the sale of the above noted products.
Liquidity and Capital Resources
The Company's stockholders' deficit as of December 31, 1999 is $260,728 and its
current ratio (current assets divided by current liabilities) is 44%. Primarily
because of the Company's sale of a unit in the current quarter ended December
31, 1999, net cash used by operating activities declined from $78,634 in the
comparative prior year quarter to $26,667, currently. Management expects sales
of its existing products to increase as its marketing efforts begin to take
effect and that this increase will improve the Company's liquidity. However, the
Company's ability to continue operations as a going concern remain dependent on
the success of the Company's existing products (the RS 3000 and RS 2000) in the
marketplace and the resulting order deposits and sales collections, as well as
continued cooperation of its subcontractors and the ability of the Company to
raise additional capital. Although Management
7
<PAGE>
anticipates the above items can be accomplished, no assurances can be given. In
that event, operations of the company will be significantly unfavorably
affected.
PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
The Company is not involved in any material legal proceedings or litigation, and
the officers and directors are aware of no other pending litigation which would
have a material adverse effect on the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER EVENTS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION LOCATION
27 Financial Data Schedule Filed herewith electronically
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter ended December 31, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Rad Source Technologies, Inc.
Dated: February 14, 2000 By: /s/ Randol Kirk
---------------
Randol Kirk, Chief Executive Officer
and Principal Financial Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheets and statements of operations found on pages 3 and 4 of the Company's Form
10-QSB for the quarter ended December 31, 1999, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 1,377
<SECURITIES> 0
<RECEIVABLES> 29,792
<ALLOWANCES> 0
<INVENTORY> 191,275
<CURRENT-ASSETS> 223,444
<PP&E> 3,468
<DEPRECIATION> 753
<TOTAL-ASSETS> 246,622
<CURRENT-LIABILITIES> 507,350
<BONDS> 0
0
0
<COMMON> 2,410
<OTHER-SE> (4,414,652)
<TOTAL-LIABILITY-AND-EQUITY> 246,622
<SALES> 89,000
<TOTAL-REVENUES> 89,000
<CGS> 56,500
<TOTAL-COSTS> 131,858
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 250
<INCOME-PRETAX> (99,608)
<INCOME-TAX> 0
<INCOME-CONTINUING> (99,608)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (99,608)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
